United States regulators have called for cryptocurrency contracts to be self-certified, requiring exchanges to take full responsibility for compliance with commodity laws and demanding a keener eye on contract detail.
The unique products will start trading on Monday, December 18, 2017, and offer investors the chance to bet on the price direction of bitcoin without needing physical access to the cryptocurrency.
Derivatives marketplace operator CME Group will launch a bitcoin futures product on December 18, ending speculation as to when the much-anticipated offering would be available on the USA markets.
Cboe offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, US and European equities, exchange-traded products (ETPs), global FX and multi-asset volatility products based on the Cboe Volatility Index (VIX Index), the world's barometer for equity market volatility. Both contracts will be priced against and settled in the cash bitcoin market.
The derivatives marketplace operator will launch Bitcoin futures contracts in less than three weeks.
Bitcoin, which had been trading at around $10,150 U.S. on the Luxembourg-based Bitstamp exchange before the news, jumped following the news, leaving it up more than six per cent on the day.
The CFTC's decision came with the warning that bitcoin remains a largely unsupervised market.
"Nevertheless, investors should be aware of the potentially high level of volatility and risk in trading these contracts".
CME contracts require initial margin of 35 per cent, though that may be ramped up for end users as futures commission merchants add an additional margin layer.
CME has been vying with CBOE to introduce the first bitcoin-related financial product. CFTC also gave Cantor Exchange a contract for bitcoin binary options.
Nasdaq has also had interests and plans to launch its own bitcoin futures on its New York-based exchange, but according to sources familiar with the matter, Nasdaq is not expecting to launch them until mid year 2018.