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September 22, 2020
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CME Bitcoin Futures: 50% of contracts expire Friday (29)

CME Bitcoin futures saw broad demand growth in 2020

Bitcoin has seen some rather lackluster price action in recent times. After its most recent $ 10,000 rejection, the cryptocurrency found itself caught in a bearish trend that brought it close to $ 8,600.

Although this decline has caused the asset to lose more than $ 1,000 from its recent highs, its downward speed has still been quite moderate, with buyers working hard to cement $ 8,800 as a strong support region.

This support may not last much longer, as the expiration of contracts at CME can generate volatility due to the operators who roll over these positions.

CME’s Bitcoin products have seen massive growth in recent times, with “open interest” (‘OI’ or ‘open interest’ referring to the total number of outstanding derivative contracts that have not been settled) on the platform recently establishing new highs of all time.

Traders have been heavily using their BTC options and futures, and the popularity of these products is clearly seen when looking at their OI.

Currently, CME’s Bitcoin futures have around $ 420 million in OI, marking a slight decline from historical highs of $ 532 million.

Options on the platform also saw growth, with OI rising from approximately $ 20 million in the first months of 2020 to highs set last week at $ 174 million.


Now, 50% of the open interest for futures and options on the platform is expiring.

“Bitcoin equivalent 23k futures and Bitcoin 10k options are set to expire this Friday at CME. Approximately 50% of the OI for each product. Watch the ‘rolls’, ”noted the Skew data platform.

What does this mean for Bitcoin?

Traders using futures contracts often “roll” their contracts from the month they are due to expire in future months.

This allows them to hold the same position, despite the expiration of the original contract, and is done by selling the first month’s contract to buy one with a later maturity.

The quick sale of these contracts may have implications for Bitcoin’s price action, although it is important to note that CME’s total share in the cryptocurrency market still remains quite small.

Thus, the change in position of options among traders on the platform, which will be seen before Friday, may have only moderate effects on the market.

Source: Bitcoinist

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