Barring any issues raised by regulators, CME Group’s bitcoin futures will begin trading on December 11.
CME Group, one of the largest exchange groups in the entire world, has released information about the contract launch on its website, after CME CEO Terry Duffy’s head-turning proclamation from last week. During that announcement, Duffy said that trading can kick off as early as the second week of December.
The announcement resulted in a lot of talk on Wall Street, and fuelled a big rally in the cryptocurrency.
Futures, which permits two parties to exchange an asset at a specified price at a set date in the future, has been a fixture in the industry since the late 19th century. In various situations, when a futures contract settles the buyer of the contract can receive their payment in the product itself or in cash. The latter is referred to as cash settled futures. CME’s bitcoin futures will settle in cash.
Just recently, the company has practically confirmed the development with this statement on its website:
“Effective Sunday[,] 10 December 2017 for trade date Monday[,] 11 December 2017, and pending all relevant regulatory review periods, please be advised that CME will launch Bitcoin Futures.”
Each contract will comprise 5 BTC, trading on both the CME Globex and CME ClearPort systems and using CME’s existing bitcoin price indices. Spot position limits are set at 1,000 contracts, according to CME. As for the contracts, CME said minimum price fluctuations or ticks as the market calls them, are slated at $5 per bitcoin, representing a total of $25 for each one.
Additional statements that can be found on CME’s website, also points out how it will manage the possible fluctuations in the price of bitcoin.
“Special price fluctuation limits equal to 7% above and below prior settlement price and 13% above and below prior settlement price and a price limit of 20% above or below the previous settlement price. Trading will not be permitted outside the 20% above and below prior settlement price,” the company explained on their post.
