Bitcoin futures will be listed on CME Group, CBOE

On Friday, December 1st 2017, U.S. regulators announced that CME Group Inc. and CBOE Global Market Inc would be able to list bitcoin futures. U.S. will be the first traditional regulated exchange to allow trading bitcoin related contracts, facilitated by the earlier announcement by the Commodity Futures Trading Commission.

Bitcoin shot above $11,000 this week. Investors saw a 1000% increase in the value of bitcoin this year. However, it lost nearly 20% of its value in hours this week as well. These price movements indicated abnormal volatility in the Bitcoin market. Bitcoin futures will be priced against the cash bitcoin market. CME and CBOE will require 35 per cent to 40 per cent initial margin on the futures to protect against volatility.

At the same time the exchanges agreed to share information and send the CFTC data on the settlement process so the regulator can monitor potential market manipulation, price discovery and market dislocations due to flash rallies and crashes, and trading outages.

After the CME and CBOE approval, Reuters reported that Nasdaq OMX Group is also exploring opportunities for launching contracts before year end.

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