CBOE To Launch Ethereum Futures By the Year End

02. Sep 2018 Posted by Akolkar B on News

As per the Business Insider report on Thursday, August 30, the Chicago Boards Options Exchange (CBOE) is planning to launch Ethereum Futures contracts by the end of 2018. This will be CBOE’s second attempt of launching a digital currency futures contract after having successfully launched the Bitcoin Futures last year in December 2017.

Sources familiar with the matter said that CBOE would be getting the pricing data for Ethereum Futures from the New-York based crypto exchange Gemini. The same exchange also provides pricing data for CBOE’s Bitcoin futures, currently.

CBOE wants to be the first to bring Ethereum futures to the market which will subject the digital currency to be traded in a two-sided market, meaning it will allow professional traders to hedge both - long and short positions.

Futures allow the traders to speculate on the product’s future price and thus take buy or sell cal to be executed at a specific future price and a specific future date.

However, for CBOE to get this product to the market, it has to undergo a regulatory screening by Commodity Futures Trading Commission (CFTC) that looks after the trading of derivatives and futures products. Moreover, SEC’s decision that Bitcoin and Ethereum are not securities could give CBOE the advantage of launching an Ethereum product in the derivatives market.

CBOE Global Markets president Chris Concannon then said, “This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”

No details are currently available whether the CBOE ETH futures will be cash settled or will involve holding physical ETH tokens. However, looking into the nature if CBOE Bitcoin futures which are completely cash settled, i.e without any requirement of holding BTC tokens physically, the possibility of cash-settled ETH futures is higher.

CBOE is working hard to get more institutional involvement in the crypto space which can drive the $200-billion plus crypto market further. The company is seen working on several crypto investment products in this regard.

In July, the company applied for Bitcoin exchange-traded-fund (ETF) with the U.S. Securities and Exchange Commission, the decision of which has been postponed to the end of September. CBOE president Chris Concannon earlier said that the company is willing to take the first mover-advantage in the crypto ETF market.