CME Group, the world’s largest derivatives market in terms of volume, announced plans to list Ethereum options three days before Ethereum’s transition to proof-of work (PoW), to proof-of–stake (PoS). CME’s ether option product is undergoing regulatory review. The company explained that the options contract would be priced at 50 ether per contract using the CME CME CF Ether Dollar Reference Rate.
The Chicago Mercantile Exchange, also known as CME Group, announced the intention to list ethereum option contracts three days prior to The Merge on September 12, 2022. CME explained that the new ether option will join the firm’s Bitcoin options and small-sized bitcoin and ether contracts.
The derivatives market said that the new contracts will deliver one ether future, sized at 50 Ethereum per contract and based upon the CME CFE CF Ether Dollar Reference Rate. This serves as a once-a day reference rate for the U.S. dollar price ether. CME’s global head for equity and FX, Tim McCourt, said on Thursday that the new contracts offer ether options.
McCourt stated in a statement that “the launch of these options contracts builds upon the significant growth, deep liquidity and we have seen in Ether futures which have traded over 1.8 million contracts to-date,” McCourt added. CME executive McCourt added:
CME Group continues to be a preferred choice for market participants as they approach the Ethereum Merge, which is expected to take place next month. The new ether options offer clients more flexibility and greater precision to manage their ether exposure in advance of market-moving events.
CME Group will join several exchanges that offer ethereum option contracts, including Okex, Bit.com and Huobi. $11.38 million in ether options volume was recorded by Deribit, which commanded $10.86 billion from all four of the ETH options exchanges. Deribit holds the largest market share for ether option open interest, compared to Huobi, Okex and Bit.com’s open interest figures.
CME Group is the second-largest in terms bitcoin options open interest, with $441 million recorded as of August 17. CME is the third largest for bitcoin options volume, while Deribit is in the lead. Okex is able to capture slightly more volume in bitcoin options.
TP ICAP Digital Assets, Akuna Capital and Akuna Capital have partnered with CME to support the rollout of ether options. TP ICAP Digital Assets was excited to support CME Group with the rollout its full-sized Ether Options contract,” Sam Newman, TP ICAP’s head for brokering, said during the announcement. Customers at TP ICAP have eagerly awaited the arrival of this larger-sized Ether option in conjunction with the popular Micro Ether option.