The world’s leading derivatives marketplace—CME—announced that it would launch options on Ethereum futures on 12 September.
Ethereum’s much-anticipated network upgrade—The Merge—is set to happen either on the 15th or 16th of next month. Market participants have placed directionally obvious bets on ETH via the derivatives route. CME’s launch of options on futures highlights that the derivatives marketplace wants to encash on the bubbling interest.
Talking around similar lines, Tim McCourt, Global Head of Equity and FX Products, CME Group, said,
“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.”
The Ethereum number talk
The derivatives marketplace has seen “significant growth and deep liquidity” in their existing Ether futures. CME has, notably, traded more than 1.8 million contracts to date.
Per the announcement, the new product is sized at 50 Ether per contract and will expand CME Group’s existing suite of cryptocurrency options contracts. The same includes Bitcoin options, along with micro-sized Bitcoin and Ether options.
On the whole, Ethereum’s OI has been inclining late on both the futures and options fronts. Per data from Coinglass, the futures OI stood around $4.79 billion in mid-June. However, it has almost grown twice in size and currently stands at $8.8 billion.
Options OI, on the other hand, has noted an even steeper incline. From the beginning of July’s $2 billion, the number has already crossed $8 billion and is currently at its all-time high.
Even though the same might seem a positive development, it has a flip side. As analyzed in a recent article, the derivatives market, as a whole, is in backwardation post-September, meaning traders expect ETH’s price to slash down post the Merge, for they consider it to be a ‘buy the rumor, sell the news kind of event.