CME is not going to slow down Bitcoin futures trading following the example of Cboe
The Chicago Commodity Exchange CME Group does not plan to exclude Bitcoin futures from listing or to slow down trading with this instrument, following the example of the Cboe options exchange. CoinDesk writes about this concerning the CME press service.
Last week it became known that Cboe refused to list Bitcoin futures in March. She explained this by the fact that she needed to reconsider her approach to working with this product. However, the main reason may be the low interest of traders in futures.
The publication notes that the trading volume of bitcoin futures at CME is approximately twice as high as Cboe. For example, as of March 14, the daily trading volume at CME was 4,666 contracts compared to 2,089 Cboe contracts.
What is the reason for such superiority of CME over Cboe?
One of the reasons may be the difference in how the two exchanges approached the sale of the product, says CEO of Level Trading Field Lanre Sarumi. First of all, CME made its product available to a larger group of traders.
- “Connecting to CME and Cboe is expensive. But if you already trade other products on the exchange, then there are no new costs. Otherwise, you must pay for the connection, software license, market data, and cross-connections. All this is to trade one new product.”
Sarumi notes that Cboe places bitcoin futures on its Cboe Futures Exchange (CFE), where people mostly trade futures on the Cboe Volatility Index (fear index): “If you don’t trade VX, then it’s worth paying hundreds of dollars to get access to the bitcoin futures market? ".
CME, in turn, placed Bitcoin futures in a group of stocks on the CME, which offers many products and asset classes that are in high demand. Thus, many traders who are already trading various assets in the CME should not take additional steps to enter the bitcoin futures market.
The pricing method could also contribute to the CME advantage: while Cboe relies only on Gemini stock quotes, the CME collects data from several trading platforms, and this causes more confidence in the exchange from traders.