Derivatives Exchange CME Group to Offer ETH Options
  • Investors may speculate on the price of the second-largest cryptocurrency.
  • The merging event planned for later this week is a major factor in the soaring demand.

One of the world’s largest derivatives exchanges, CME Group, will soon provide Ethereum options contracts. Derivative instruments, such as options and futures, provide investors with additional avenues for speculating on the price movements of underlying assets.

Options contracts serve the same purpose as futures contracts but do not obligate the holder to purchase or sell the underlying asset until the contract’s expiration date. Thus, investors may speculate on the price of the second-largest cryptocurrency by market capitalization by purchasing Ethereum options and exercising them at a certain future time.

The Merge Bringing in Demand

The significant increase in trading activity on CME Group’s Ethereum futures product over the last several months is largely responsible for the launch of options. Tim McCourt, global head of stock and FX products at the business, said that Ethereum futures have “seen a 43% increase in average daily volume year over year.” With the release of this new options product, traders in the derivatives market now have more alternatives at their disposal.

McCourt stated:

“The launch of our new Ether options contracts is particularly well-timed to provide the crypto community with another important tool to gain access to and manage exposure to ether.”

He also said that the merging event planned for later this week is a major factor in the soaring demand. The Ethereum network’s consensus mechanism will transition from the energy-intensive proof-of-work (PoW) to the less resource-intensive proof-of-stake (PoS) as a result of the upgrade. The Ethereum Foundation claims that the network’s energy consumption would drop by 99.5% after the merging event.

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