Chicago Mercantile Exchange launches options on Ethereum

A CME Group employee noted that interest in the product is surging in the run-up to the Merge network upgrade

12.09.2022 - 15:30

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What’s new? The Chicago Mercantile Exchange (CME) announced the launch of Ethereum options. CME Global Head of Equity and FX Products Tim McCourt noted that interest in ETH options is surging ahead of The Merge upgrade, which will see the network transition from the Proof-of-Work (PoW) consensus algorithm to Proof-of-Stake (PoS).

Press release

An option is a contract that gives a trader the right to buy or sell an underlying asset (financial instrument) at a specified strike price on or before a specified date, depending on the form of the option.

What else do the experts say? Rob Strebel, Head of Relationship Management, said options are an important part of the trading strategy used by institutional counterparties, whether it's to hedge risk or gain access to an asset class without having it on the balance sheet. He added:

“CME Group has proven trading and clearing infrastructure backing the product and we're excited to provide liquidity on day one. As ether transitions through the anticipated merge this week, we expect we'll continue to see strong demand for this Ether options contract.”

As of August 12, 14:55 UTC, ETH is trading at $1749, having lost 1,09% in a day, according to Binance.

What is known about CME Group? The platform enables futures and options trading, portfolio optimization, and data analysis for risk management. CME Group launched its first dollar-denominated BTC futures contract in December 2017, followed by an ETH futures contract in February 2021. In March 2022, the exchange also launched BTC and ETH-based option micro futures. On August 29, CME launched euro-denominated bitcoin and Ethereum futures trading.

On April 25, CME Group and CF Benchmarks launched 11 cryptocurrency indices. These include altcoins ALGO, ATOM, SOL, BCH, LTC, XLM, ADA, DOT, LINK, MATIC, and UNI. The indices are calculated and published on a daily basis.

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