The Chicago Mercantile Exchange (CME) Group is set to launch options on its Bitcoin Friday futures, offering retail-friendly, cash-settled tools to help traders manage Bitcoin’s price volatility. The new options are scheduled to go live on February 24, pending regulatory approval.
CME Expands Bitcoin Derivatives Offerings
These options will complement CME’s existing lineup of Bitcoin and Ether futures, which include physically settled contracts. Unlike spot Bitcoin transactions, these options will settle in cash, providing traders with a simplified way to hedge their crypto exposure without directly handling Bitcoin.
According to Giovanni Vicioso, CME’s global head of cryptocurrency products, the smaller contract size and daily expiries will offer market participants greater flexibility and efficiency in managing short-term Bitcoin price movements.
Bitcoin Friday futures, introduced in September 2023, are designed for retail investors, with each contract representing just one-50th of a Bitcoin. This makes them more accessible than larger institutional contracts and rivals products like Coinbase’s “nano” Bitcoin futures, which trade in increments of one-100th of a Bitcoin.
Since their launch on September 29, CME’s Bitcoin Friday futures have seen significant activity, with over 775,000 contracts traded and an average daily volume of 9,700 contracts.
Growing Bitcoin Options Market in the US
The introduction of Bitcoin Friday futures options adds to the expanding crypto options market in the United States.
In September 2023, the U.S. Securities and Exchange Commission (SEC) approved Nasdaq’s electronic securities exchange to list options on the iShares Bitcoin Trust ETF (IBIT), marking the first time the agency allowed options trading on a spot Bitcoin ETF. In October, the SEC extended similar approvals to the New York Stock Exchange and Cboe Global Markets.
Options contracts provide traders the right—but not the obligation—to buy (call) or sell (put) an asset at a predetermined price. These financial instruments play a critical role in risk management and speculative trading, and their expansion into crypto markets is expected to drive greater institutional participation.
Investment managers anticipate that Bitcoin options will accelerate mainstream adoption and could unlock significant value for BTC holders by providing new ways to hedge risks and optimize trading strategies.
