CBOE to launch bitcoin futures trading Sunday

Gladys Abbott
December 5, 2017

In recent months, the price of bitcoin has fluctuated wildly, trading from a little over $1,300 in April up to more than $7,400 in early November, before falling again below $6,000 following the news that a much-anticipated "fork" in the bitcoin blockchain was not going ahead.

Official trading and full day trading of the futures will begin on December 11, and trading will be free through December. This memorandum is considered advertising under applicable state laws.

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

Bitcoin futures trading by Chicago derivatives exchange operator CME Group will be launched on December 18 as the path has been cleared recently thanks to the regulatory approval. "We are committed to encouraging fairness and liquidity in bitcoin markets". Bitcoin's market capitalization reached $192.3 billion on Monday afternoon Beijing time, as the price of the cryptocurrency surged to $11,503, according to data provider CoinMarketCap. But there are a couple of differences between bitcoin futures trading at the two exchanges.

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The contracts will initially require a margin deposit of 35%, and will be subjected to "hard" price limits of 20% - the contracts won't be able to rise or fall by more than 20% on any given day, the statement said.

On the other hand, CME plans to use the services of four bitcoin exchanges - Bitstamp, GDAX, itBit and Kraken - to set its Bitcoin Reference Rate (BRR).

The Commodity Futures Trading Commission said it had discussions with the exchanges to protect consumers from extreme price swings. Those amounts may become higher in the future.

The CBOE's announcement brings bitcoin one step closer to institutional traders, who are expected to be the primary customers for such trades.

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