CME Group To Offer Bitcoin Futures Trading

Alicia Cross
December 5, 2017

Chicago-based CBOE said trading will start on its CBOE Futures Exchange at 5 p.m Central Time on Sunday, the beginning of global trading hours, with December 11 being the first full day.

Bitcoin trading markets seem to have already priced the CBOE's move into their assessment of the cryptocurrency's price.

Bitcoin's price has soared tenfold this year, prompting many market participants to warn of a bubble as it topped United States dollars 11,000 for the first time last week. CBOE said Monday that trading will open at 5 p.m. on Sunday, Dec. 10, with Dec. 11 as the first full day of trading.

Bitcoin futures and other derivatives would make it easier for more investors and speculators to trade the new asset class.

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"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", stated Ed Tilly, CEO of CBOE. Bitcoin itself is now bought and sold on platforms that are virtually unregulated, which has made some money managers uncomfortable with the market even as prices soar.

It means that investors will be able to buy and sell "future" contracts in Bitcoins - an agreement to buy the crypto-currency, for example, in three months time at a certain price. CBOE will derive its bitcoin contract price from the Gemini bitcoin exchange, which is owned by the Winklevoss twins, Cameron and Tyler. 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.

Cboe is working with online brokerages to allow retail investors to start trading its bitcoin futures as soon as possible, a spokeswoman for the company said. CBOE has already expressed its desire to list these products, and - just this week - The Wall Street Journal reported Nasdaq Inc. hopes to list bitcoin futures on one of its USA exchanges during the first half of 2018.

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