An article to understand CME Group’s micro-Ethereum futures MET

As one of the world’s largest derivatives market, but also in the Chicago business continues to expand its encryption currency derivative product.

After announcing the launch of micro bitcoin futures in April this year , the Chicago Mercantile Exchange announced on the evening of November 2 that it planned to launch a similar micro ether futures contract- Micro Ether Futures (MET), with a scale of 0.1 ETH . It provides new Ethereum exposures for institutional traders and individual transactions, and has better risk management advantages. However, this product still needs to wait for regulatory approval. If all goes well, it is expected to go online on December 6, 2021 and become the fourth crypto derivative product launched by CME Group (the other three are Bitcoin futures). , Ethereum futures and micro bitcoin futures).

What is Micro Ether Futures?

According to official CME Group information, the size of the Micro Ether Futures contract is one-tenth of 1 ETH. Due to its small scale, it is possible to manage Ethereum exposure in an efficient and economical way, and then to be able to further optimization of investment trading strategies person. Not only that, the small scale of Micro Ether Futures also means that the transaction amount is relatively low, but it can still enjoy the same functions and services as large-scale Ethereum futures. Therefore, regardless of whether the trader is a “large” or “small”, Both can use the same level to manage the risks of Ethereum, and the advantages of investment diversity can also be improved.

Contract size: 0.10 ether

Trading time and location: CME Globex US Eastern Time 6 : 00-5 : 00 PM Sunday to Friday (5:00 pm-4:00 pm Central Time), daily rest from 5:00 PM Eastern Time 60 Minutes (4:00 pm Central Time); ClearPort: Sunday at 6:00 pm Eastern Time, 6:45 pm Sunday to Friday (5:00 pm Central Time-5:45 pm Eastern Time), Monday to week On Thursday, there is a 15-minute maintenance window between 6:45 pm and 7:00 pm (5:45 pm-6:00 pm Central Time).

Minimum price fluctuation: Outrights: $0.50 per ether = $0.05 per contract

Product code : CME Globex: MET, CME ClearPort: MET, Clearing: MET, BTIC: MRB

Transaction method: financial settlement

Listing cycle: Monthly contracts listed for 6 consecutive months and 2 additional “12-month monthly contracts”. If the “12 month contract” is included in the monthly contracts listed for 6 consecutive months, only one additional “12 month contract” will be listed.

Final settlement: The settlement will be settled in cash with reference to the final settlement price, using the CME CF Ether- Dollar Reference Rate reference rate on the last trading day .

Trading termination: Micro Ether Futures trading ends at 4:00 pm on the last Friday of London time, based on London or US business days. If the last Friday of the contract month is not a London and US business day, then The transaction was terminated on the previous London or U.S. business day.

Features and advantages

CME Group officially listed the four functions and advantages of Micro Ether Futures, namely:

1. Support fine-tuning of Ethereum ETH exposure

Compared with the “larger” Ethereum futures, the contract transaction scale supported by Micro Ether Futures is about 1/500 of its size, so it can improve the accuracy of investors’ trading strategies, and it can also support the gradual increase or decrease of positions more conveniently.

2. Enjoy more transparent futures price discovery

CME Group is a regulated trading platform. On this platform, all participants see the same price and quotation of the settlement contract at the CME CF Ether USD reference exchange rate, so the transparency is relatively high.

3. Save potential margin costs

Like ether futures, bitcoin futures and options , and micro bitcoin futures, Micro Ether Futures can also enjoy the highly efficient services of CME Group Futures and save potential margin costs.

4. Explore multiple trading methods

Like Ether futures, Bitcoin futures and options, and micro Bitcoin futures, Micro Ether Futures can also be traded electronically through CME Globex, block trades and EFRP for bilateral trade, or use index closing time basis trading (BTIC) Transaction.

Tim McCourt, Global Head of Stock Indices and Alternative Investment Products at CME Group said:

“Since the launch of Ether futures in February, we have seen steady growth in contract liquidity, especially for institutional investors. At the same time, since the The demand for this market has also made this market easier to be accepted by a wider range of participants. Micro-Ethereum futures will provide traders with more choices and accuracy, while also allowing them to obtain CME Group’s transparent, standardized and efficient services .”

In fact, CME Group has achieved good results in launching “micro” cryptocurrency derivatives products. According to disclosed data, since the launch of micro bitcoin futures in May, more than 2.7 million contracts have been traded. In addition, Ether Square futures contract about trading volume of more than 675,500 copies (the equivalent of approximately 33.8 million ETH). Not only that, as of now, CME Group has more than 20 “micro” products, and the volume of these contracts has so far exceeded 1 billion.

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