CBOE Releases New Details on Bitcoin Futures Contracts

Options exchange CBOE has released early specifications for its planned bitcoin futures product.

AccessTimeIconNov 20, 2017 at 9:10 p.m. UTC
Updated Sep 13, 2021 at 7:10 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Options exchange CBOE has released early specifications for its planned bitcoin futures product.

In a blog post from Friday, the company published some of the technical details for its futures contract, which will be listed under the symbol XBT – that is, of course, pending approval from U.S. regulators. The development dates back to August, growing out of an initial partnership that saw New York-based exchange startup Gemini (owned by investors Cameron and Tyler Winklevoss) providing data to the Chicago-based CBOE.

It's a development that adds further fuel to efforts to create trading products tied to the cryptocurrency market. With a futures contract, two parties agree to trade an asset – in this case, bitcoin – at a predetermined time and price. Those involved in the agreement seek to make a profit on the difference between the quoted price and its actual value when the contract expires.

Derivatives exchange operator CME Group is moving to launch its own product within weeks, and startups like LedgerX have been pursuing new markets for the exchange of such contracts.

And although the exact listing date isn't available, CBOE's website had other points of interest related to the XBT listing, including the indication that both weekly and quarterly contracts will be available. The listed contract multiplier is 1 BTC, according to CBOE, and the settlements will be paid out in cash.

In detailing the efforts to develop the product, CBOE's Russel Rhoads wrote that readers may want to avoid trying to predict how futures prices will relate to today's price, noting:

"The question I am constantly hearing is, 'How will the futures prices relate to spot bitcoin pricing,' and the best (and most honest) answer I can give is, 'I don’t know.' ... Personally I think the best strategy is to see what the market tells us when bitcoin futures are available for trading."

Rhoads also ran a comparison between the CBOE Volatility Index, its stock market volatility index and bitcoin's degree of price fluctuation, finding that "they are pretty darn similar."

Disclosure: CME Group is an investor in Digital Currency Group, CoinDesk's parent company. 

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.