Options on bitcoin futures from Chicago Mercantile Exchange got off to a good start on Monday, seeing trading volume reach 55 contracts in the opening session.
That amounts to a notional volume of about $2.3 million or 275 bitcoin, with each contract worth 5 BTC. Also, only call options traded on the first day, as noted by Skew.com, provider of data analytics for Bitcoin and Ether derivatives.
A call option gives the holder a right to buy, while the put option gives the holder the right to sell.
The growth of bitcoin options is widely being touted as a move in the right direction for the cryptocurrency as it may boost institutional participation and help bitcoin evolve into a mature asset class.
Institutional trading platform Bakkt, a subsidiary of Intercontinental Exchange, launched bitcoin options on Dec. 9, with very little action on the first day.
CME's launch-day trading volume was nearly double the average daily volume seen on Bakkt since then.
Options volumes on the CME may rise rapidly, too, as it has a robust, liquid underlying futures market.
"Successful options products require a robust, liquid underlying futures market, our CME Bitcoin futures have rapidly evolved over the last two years to become one of the most liquid, listed bitcoin derivatives products in the world, averaging nearly 6,400 contracts traded each day in 2019," Tim McCourt, managing director at CME Group, wrote in a LinkedIn post.
CME's bitcoin futures contracts witnessed increased participation in the days leading up to the options launch.
The number of open positions held by traders, known as open interest, increased to more than 5,000 contracts in the first four trading days of the year.
CME's Bitcoin Options See First-Day Volume of $2.3M
Published on Jan 14, 2020
by Coindesk | Published on Coinage
Mentioned in this article
"Patoshi" Bitcoin dev believes Satoshi may never touch his BTC, speaks on ETH 2.0 and RSK
Satoshi Nakamoto, a pseudonym for the unknown, mysterious creator of Bitcoin continues to baffle most with two aspects; one, his well-kept identity, and two, the extent of his multi-billion worth stash of Bitcoin.
Someone Just Anonymously Dropped an ETH 2.0 Scaling Solution on Medium
As the world awaits Ethereum 2.0 staking implementation, someone operating under the pseudonym "Heyheeyheeey" posted a Medium article with a solution based on the protocol.
The Code Is Key: Solutions for Overcoming DeFi Security Breaches
While the sector has been applauded for bringing about innovative digital finance solutions from lending to payments, progress has been overshadowed by high profile security breaches.
US Regulators Have Double Standards When It Comes to Bitcoin
Bitcoin exchange-traded funds, or ETFs, have faced unfair pushback from U.S. regulators, according to VanEck director and digital asset specialist Gabor Gurbacs.