CME Group announced on Jan. 29 that it would introduce options on its Bitcoin (BTC) Friday futures. The new contracts will launch on Feb. 24.

According to the announcement, the contracts are CME’s first financially settled crypto options product, although they are still pending regulatory approval.

Giovanni Vicioso, CME Group Global Head of Cryptocurrency Products, stated that the product aims to provide traders with tools to manage short-term Bitcoin price risk. He added:

“Building on the success of our Bitcoin Friday futures, the smaller size of these contracts, along with daily expiries, offer market participants a capital-efficient toolset to effectively adjust their bitcoin exposure.”

Unlike traditional weekly options, these contracts will feature expiries every business day, Monday through Friday, allowing for more precise risk management.  

The announcement also highlighted that the new options’ financial settlement adds convenience for traders seeking to hedge Bitcoin price movements without the complexities of physical settlement.

Introducing options on Bitcoin Friday futures will complement CME’s existing suite of physically settled crypto derivatives, including Bitcoin, Ethereum (ETH), Micro Bitcoin, and Micro Ether futures.

Since their debut on Sept. 29, Bitcoin Friday futures have quickly become one of CME Group’s most successful crypto product launches. The company shared that more than 775,000 contracts were traded, with an average daily volume of 9,700. Notably, 44% of contracts were traded during non-US hours.

Demand for crypto risk management tools

The launch comes at a time when institutional interest in Bitcoin is high. Private companies are adding BTC to their treasuries, and even countries—such as the US, Brazil, Switzerland, and the Czech Republic—are considering it for their reserves.

Joshua Lim, Global Co-head of Markets at FalconX, addressed this movement:

“Given the increasing density of tradable catalysts in crypto, CME Group’s new option suite on Bitcoin Friday futures provides the granularity that market participants need for hedging and expressing nuanced views on Bitcoin.”

Galaxy Global Head of Trading Jason Urban echoed the sentiment, stating that the options provide a “flexible and cost-effective way” for traders to optimize risk management while responding to shifting market conditions.

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