About eight months after launching its first Ether derivative, CME Group is looking to bring another level of diversification to cryptocurrency traders with a micro Ether futures contract.
Closely related to its older brother, the smaller contract is based on the same underlying benchmark, the CME CF Ether-Dollar Reference Rate, and will be settled in cash. Micro Ether futures will be priced at this index which has been developed in partnership with Crypto Facilities to provide the real-time price of ether in dollars. The index benchmarks price data using the transactions and order book activity of several cryptocurrency exchanges, currently comprised of Kraken and Bitstamp.
The micro-contract, which is expected to start on December 6, will only have a tenth of the notional value of the initial contract. CME’s mini futures on cryptocurrency # 2 are currently under review by regulators, and the exchange operator has confirmed that once the addition is cleared, they will be available for purchase.
Chicago-based CME said the move marked a new development in the nascent cryptocurrency futures market that would provide new access to retail investors, whether they are looking to enter different markets or are struggling. to participate due to limited capitalization.
One-tenth the size of standard contracts offers professional traders many advantages when trading these low risk contracts.
“Since the launch of Ether futures in February, we have seen steady growth in the liquidity of these contracts, especially among institutional traders. At the same time, the price of ether has more than doubled since the introduction of these contracts, creating demand for a small contract to make this market even more accessible to a wider range of participants. Micro Ether Futures will provide even more choice and precision in how they trade Ether Futures in a transparent, regulated and efficient manner within the CME Group, ”said Tim McCourt, Global Head of Indices stock market and alternative investment products of the CME group.
The surge in prices led to an increase in open interest and trading volume for CME’s ether futures contracts as investors sought to hedge their positions in the spot market by opening futures positions in the CME. stock Exchange.
Additionally, mini ETH derivatives come just five months after the launch of micro Bitcoin futures, which was the latest move from the world’s largest futures exchange operator to expand into the crypto business.
The CME also provided updated metrics on its micro Bitcoin futures contracts, which averaged 21,000 contracts, including more than 2.7 million contracts in total since their launch in May. In addition, to date, more than 675,500 Ether futures (equivalent to approximately 33.8 million Ether) have been traded.