Cboe Says It Will Start Bitcoin Futures Trading on December 10

Trading on the CBOE Futures Exchange (CFE) under the "XBT" ticker, the company added in its release that trading of the futures product would be free through the end of December.

The price of bitcoin slumped 10.9 per cent from a record high of $US11,845 to $US10,550 before bouncing back to $US11,294 at 11am Perth time.

Bitcoin futures trading by Chicago derivatives exchange operator CME Group will be launched on December 18 as the path has been cleared recently thanks to the regulatory approval. The CME, which owns the Chicago Mercantile Exchange, said Friday the initial.

The settlement price, to be called the CF Bitcoin Reference Rate, will be based on the volume-weighted average price of trades between 3:59 p.m. and 4 p.m. London time every business day, CME said. The cryptocurrency is now trading at roughly $11,400, as per CoinDesk's Bitcoin Price Index (BPI). Its price has jumped more than tenfold this year.

"We are pleased to bring Bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities", said Terry Duffy, CME Group Chairman and Chief Executive Officer.

Last week, a JPMorgan global markets strategist forecast that the introduction of bitcoin futures would legitimize cryptocurrency in the eyes of both institutional and retail investors, transforming the cryptocurrencies into "an emerging asset class".

One of the key points about bitcoin futures trading is that there will be no handling of bitcoin at all and the futures will be cash-settled. The first bitcoin futures contracts on a regulated US exchange are set to launch on Sunday. To ensure minimal impact on markets due to bitcoin's price swings, traders will have to pay 33 percent of their trade's price upfront as compared to the 35 percent for CME bitcoin futures trades.


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