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CME Group (CME) to Launch Bitcoin Options in Early 2020

Zacks Equity Research

CME Group CME announced the launch of options on its Bitcoin futures contracts. Persuaded by the growing interest in cryptocurrencies and customer demand to manage bitcoin exposure, the bitcoin options will be launched and be available for trading on Jan 13, 2020. The launch of the options is subject to regulatory approval.

CME Group, the derivatives marketplace, has first launched Bitcoin futures nearly two years ago in December 2017. Since then, it has seen 22 successful futures expiration settlements, with over 3,500 individual accounts trading the contracts. Close to 6,500 CME bitcoin futures contracts are traded on average each day. In fact, it derives 47 % of trading volume from outside the United States.

Based on increasing client demand and robust growth in the Bitcoin futures markets, this launch will provide clients with additional tools for hedging their bitcoin price risk and trading in a regulated exchange environment. With this launch, customers will be offered greater precision and flexibility to manage their risk.

CME Group anticipates the Bitcoin futures market to grow. In sync with this, the company announced to increase the so-called spot month position limits for bitcoin futures to 2000 from 1000 for any single investor.

Another player in the same industry, the Intercontinental Exchange, Inc. ICE launched bitcoin futures contract in September, this year.

CME Group boasts the largest futures exchange globally in terms of trading volume as well as notional value traded. CME group leads with about 90% market share of the global futures trading and clearing services.

Shares of this Zacks Rank #3 (Hold) company have rallied 8.7% year to date underperforming its industry's rally of 19.9%.


Stocks to Consider

Some better-ranked stocks in the same space include MarketAxess Holdings Incorporation MKTX and Nasdaq Incorporation NDAQ. While MarketAxess Holdings sports a Zacks Rank #1 (Strong Buy), Nasdaq carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

MarketAxess Holdings operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. Its average four-quarter positive surprise is 1.45%.

Nasdaq provides trading, clearing, marketplace technology, regulatory, securities listing, information, and public and private company services worldwide.  It came up with average four-quarter positive surprise of 2.94%.

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Click to get this free report Nasdaq, Inc. (NDAQ) : Free Stock Analysis Report CME Group Inc. (CME) : Free Stock Analysis Report MarketAxess Holdings Inc. (MKTX) : Free Stock Analysis Report Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report To read this article on Zacks.com click here.