CME Group to Launch Options on Ether Futures

CME Group, a derivatives marketplace based in Chicago, announced on Thursday that it will launch options on Ether futures on September 12 amid pending regulatory review.

CME said such new contracts will deliver one Ether futures, sized at 50 Ether per contract, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of Ether.

The Ether options offerings will expand CME Group's existing suite of crypto options contracts, including Bitcoin options and micro-sized Bitcoin and Ether options.

Tim McCourt, Global Head of Equity and FX Products, CME Group, commented about the development: "The launch of these new options contracts builds on the significant growth and deep liquidity we have seen in our existing Ether futures, which have traded more than 1.8 million contracts to date.”

McCourt said as the crypto market approaches the highly awaited Ethereum Merge next month, CME continues to see market players turning to the company to manage Ether price risk.

The launch of the new options is supported by market participants who are seeking to provide their customers with wider hedging options within the crypto landscape.

Sam Newman, Digital Assets Head of Brokering at TP ICAP, said: “With the upcoming Ethereum protocol merge, we expect this new contract to see significant interest from both our traditional customers as well as crypto native clients.”

Ryan Duckworth, head of trading at US-based Akuna Capital Head of Trading, also commented: “As the demand for crypto derivatives increases, we look forward to providing liquidity to allow customers to hedge risk and manage exposure to Ether.”

CME disclosed that its standard- and micro-sized Ether futures contracts have witnessed tremendous growth and continue offering consistent customer liquidity, volume, and open interest.

The firm experienced record daily volumes of Ether futures trading in July, with trading volumes in the second quarter surging 27% over the first quarter.

Responding to Needs of New Customers

The latest launch aims further to expand CME Group’s suite of cryptocurrency derivatives offerings.

Early this month, CME launched Bitcoin Euro and Ether Euro futures. In March, the firm launched Micro Bitcoin and Micro Ether futures options.

Such product launches are parts of efforts by CME to provide a broad range of market players – from institutions to sophisticated, active, individual traders – with greater flexibility and precision to manage their exposure to the two major cryptocurrencies by market cap.

Such a wide variety of global products are an important step in the growth of a thriving marketplace for institutions and sophisticated investors who want crypto exposure in a regulated environment.

The smaller contract sizes give investors and traders greater flexibility in participating in crypto markets with less upfront cost while opening the market up to new participants.