CBOE to Begin Bitcoin Futures Trading on December 10
05 December 2017, 01:48 | Andres Norman
Traders in the Standard & Poor's 500 stock index options pit at the Chicago Board Options Exchange fill orders. Scott Olson Getty
Bitcoin's rapid rise from less than US$800 in December a year ago to more than US$11,000 this week on Coindesk has stoked fears that it is a pricing bubble that could leave recent investors worse-off.
CME Groupsaid trading would be available on its CME Globex electronic trading platform from 18 December.
The CBOE Futures Exchange will start trading bitcoin futures Sunday, making it the first traditional exchange to allow investors to bet on the future price of the digital currency. CME Group and CBOE Global Markets exchanges will offer investors Bitcoin futures from later this month. The cryptocurrency is now trading at roughly $11,400, as per CoinDesk's Bitcoin Price Index (BPI).
The bitcoin mania doesn't seem to be losing steam, despite repeated regulatory blows - especially in China - and growing more than tenfold in value from the beginning of this year.
Bitcoin futures and other derivatives would make it easier for more investors and speculators to trade the new asset class.
"Given the unprecedented interest in bitcoin, it's vital we provide clients the trading tools to help them express their views and hedge their exposure".
One of the key points about bitcoin futures trading is that there will be no handling of bitcoin at all and the futures will be cash-settled. Bitcoin's market capitalization reached $192.3 billion on Monday afternoon Beijing time, as the price of the cryptocurrency surged to $11,503, according to data provider CoinMarketCap.
"If the Commission determines that the margin the DCOs hold against bitcoin futures positions is inadequate, it can take measures to require that the margin levels be increased", CFTC Commissioner Brian Quintez said in a speech last week. To ensure minimal impact on markets due to bitcoin's price swings, traders will have to pay 33 percent of their trade's price upfront as compared to the 35 percent for CME bitcoin futures trades.
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