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The company which boasts the largest derivatives marketplace on the planet, CME Group, placed a smile on thousands of institutional clients who employ its gigantic marketplace on Friday when it announced the addition of Bitcoin(BTC)trade options to its platform.
As revealed by the company, CME is looking to add Bitcoin options to its marketplace, making it way easier to trade and hedge Bitcoin price risk.
The Global Head of Equity Index and Alternative Investment Products, Tim McCourt, stated:
“Based on increasing client demand and robust growth in our Bitcoin futures markets, we believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk.”
This is indeed a great relief to the thousands of institutional players who use the platform. Since its inception about 2 years ago, CME Group has worked tirelessly to place its name on the map. And it is safe to say it paid off.
While the firm already prides itself as the largest derivatives marketplace on the planet, it is yet poised to make trading of futures so much easier by introducing Bitcoin to the mix.
The platform is currently home to a ton of institutional and professional traders. With a record of over 3,300 individual accounts and an average daily trade volume of 4.3 million, we can all agree this is the right crypto pawn to move on the board.
With about 20 successful futures expiration settlements and counting, CME Group believes that adding Bitcoin options to the mix will greatly skyrocket its trade value and give its clients the opportunity to run smooth Bitcoin trading.
“These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure, as well as hedge Bitcoin futures positions in a regulated exchange environment.”
The Concern: Manipulation of the Bitcoin Price
One of the major drawbacks of trading this new class of digital assets, including Bitcoin, is that it gives room to price manipulation (as it is suspected to happen with Tether and Bitfinex), which could lead to investors losing their hard earned cash unfairly. However, platforms such as CME Group cuts down this risk factor, allowing investors to trade with more confidence.
While CME has so far allowed investors to hedge and trade benchmark options on futures across a truckload of investable asset class, it was not until now that it has considered adding Bitcoin options to the list. And we think it is just about time.
Come year 2020, we hope to see how this additional too for precision hedging and trading flourishes under the CME Group.