Micro Ether Futures sell like hot buns: 500,000+ contracts on January 24

Rick Steves

CME Group’s Micro Ether futures are hot. The derivatives marketplace announced trading volumes surpassed 500,000 contracts on January 24 as the cryptocurrency markets face downward pressure as other risk assets in traditional markets.

Micro Ether futures reached a new daily volume high of 51,450 contracts on January 24, with open interest of nearly 75,000 contracts. These futures contracts are cash-settled, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of Ether. Micro Ether futures are listed on and subject to the rules of CME.

Micro Ether Futures launches in December 2021

Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products, said: “The arrival of micro-sized contracts for both Bitcoin and Ether futures in 2021 has taken our cryptocurrency product offering to the next level. We’re pleased with the early adoption and rapid growth of Micro Ether futures since their launch on December 6. These contracts are providing one more way for both financial institutions and sophisticated, active retail traders to gain exposure to digital assets through our liquid and trusted cryptocurrency derivatives markets.”

CME Group has gone live with Micro Ether Futures in December 2021, roughly nine months after the launch of its first Ether derivative product.

Bringing another level of diversification to cryptocurrency traders, the micro Ether futures contract is closely tied to its older brother as it is based on the same underlying reference index, the CME CF Ether-Dollar Reference Rate, and is settled in cash.

The micro Ether futures is priced off at that index which was developed in partnership with Crypto Facilities to provide real-time ether price in dollars. The index references pricing data uses transactions and order book activity from several cryptocurrency exchanges, currently made up of Kraken and Bitstamp.

The micro contract has just 1/10 of the notional value of the original contract. CME’s mini futures on the No.2 cryptocurrency has been reviewed by regulators, and the exchange operator today confirms the addition was cleared and will be available for purchase.

Chicago-based CME said the move marks a new development in the nascent crypto futures market that will give new access to retail investors, either those looking to branch into different markets or struggling to participate due to limited capitalization.

One-tenth of the size of standard contracts is introducing professional traders to many benefits when trading these limited-risk contracts.

Furthermore, the mini ETH derivatives come barely five months after the launch of micro Bitcoin futures, which was the latest move by the world’s largest futures exchange operator to expand into the crypto business.

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