As the open interest for Ethereum options shoots to $8 billion, CME plans to bring ETH options contracts just ahead of the Merge event.
The world’s leading marketplace Chicago Mercantile Group (CME) announced that it will be launching the options for its Ether futures on September 12, just three days ahead of the scheduled Merge event.
The new options contracts will deliver one ETH futures, sized at 50 per contract. These Ethereum options contracts will allow investors to bet on the future price of Ether (ETH). They also provide investors the option to cash out anytime before the contracts expire.
Also, this will be based on the CME CF Ether-Dollar Reference Rate, which is a once-a-day reference rate for the USD price of Ether. Currently, CME Group already offers micro-sized ETH options. This new launch will be an addition to its product suite. Speaking on the matter, Tim McCourt, Global Head of Equity and FX Products, CME Group said:
“The launch of these new options contracts builds on the significant growth and deep liquidity we have seen in our existing Ether futures, which have traded more than 1.8 million contracts to date. As we approach the highly anticipated Ethereum Merge next month, we continue to see market participants turn to CME Group to manage ether price risk. Our new Ether options will offer a wide array of clients greater flexibility and added precision to manage their ether exposure ahead of market moving events.”
Ethereum (ETH) Options Open Interest
The world’s second-largest cryptocurrency Ether (ETH) has seen a phenomenal rally over the last 45 days. From its June lows, ETH has gained by nearly 100% as the price approached $2,000. Interestingly, the open interest for ETH options has surged to a new high of $8 billion.
This is also for the first time in history that the Ether (ETH) options open interest has completely overwhelmed the Bitcoin (BTC) options open interest. All the excitement surrounding Ethereum (ETH) has been for its upcoming event Merge. As per David Kroger, digital data scientist at Cowen Digital, institutional players have also positioned themselves for the event. Speaking to Bloomberg, Kroger said:
“Institutions have been asking us about the Merge, along with the technicalities and probabilities associated with it for several months now”.
Over the last four days, ETH has been trending downwards. As of press time, ETH is trading at $1819 levels with a market cap of $22 billion. Kroger said that traders might be willing to book profits maid the sharp price surge. On the other hand, Ethereum detractors have been mulling a hardfork in order to continue with the PoW version. This too could impact the ETH price in the near term.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.