The Chicago Mercantile Exchange (CME) Group recently tweeted that customer interest in CME Bitcoin futures remained strong in the third quarter of 2019, despite a pullback in Bitcoin prices.
On October 9, CME Group stated on Twitter that client interest in CME Bitcoin futures continued to grow strongly in the third quarter of 2019, with daily open interest (OI) exceeding 4,600 contracts, compared with the third quarter of 2018. A 61% increase was driven by strong interest from institutional investors.
Open interest, which refers to the total number of outstanding derivatives contracts that have not yet been settled, rose to 4,629 contracts from 2,873 in Q3 2018. This happened despite a nearly 25% drop in the price of Bitcoin, CME noted.
Cointelegraph previously reported that CME Group will add options to its bitcoin futures contracts in the first quarter of 2020, pending regulatory review. Tim McCourt, head of global equity indices and alternative investment products at CME Group, said at the time.
“Based on growing client demand and strong growth in the Bitcoin futures market, we believe the introduction of options will provide our clients with greater flexibility to trade to hedge their Bitcoin price risk.”
Trading in bitcoin futures has increased, with a record 34,000 futures contracts traded in May, worth $1.3 billion, or 170,000 BTC, McCourt said. Meanwhile, institutional interest in CME Bitcoin futures peaked in early summer 2019, reporting a record 56 large open interest holders in July.
McCourt said in the SCMP report that bitcoin options will allow Asian cryptocurrency miners to more accurately insure their production costs. The practice already exists in China, where miners use bitcoin futures for hedging, making the participants more than mere traders.
“While futures offer one-for-one exposure, options can offer different strike levels and can give you downside protection or upside risk at a fraction of the underlying price.”
The original text comes from cointelegraph, compiled by the Bluemountain Labs team, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
The original text comes from cointelegraph, compiled by the Bluemountain Labs team, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
