Cryptocurrencies are soon to be a hot commodity on the Chicago Mercantile Exchange (CME). The futures and options giant is preparing to launch a Bitcoin futures contract toward the end of this year.

Bitcoin Is Coming To The States!

The recent popularity of Bitcoin and cryptocurrencies has the financial establishment rethinking traditional commerce. CME’s Bitcoin futures are the first U.S. response to the popular cryptocurrency CFDs offered abroad.

From an active trader’s standpoint, this development is long overdue. Although the official launch date has not yet been released to the public, reports state that it is locked and loaded pending regulatory approval.

Contract Specs

Bitcoin futures will be settled via cash, with pricing derived from the CME’s own Bitcoin Reference Rate. Here are the contract specs:

• Each contract is based upon five Bitcoin

• Pricing will be $25 per tick

• Price limits of 20% will be set above or below previous settlement

• A Position limit of 1000 contracts

• Trade will be conducted on the CME Globex from 6:00 PM EST on Sundays until 5:00 PM EST Fridays.

Bottom Line

New markets are always an adventure while the kinks are being worked out. In order to gauge liquidity and interest, I recommend observing the early action before jumping in with both feet. At 25$ per tick, mistakes can be very costly.

For active traders, specifically in the U.S., this is exciting news. The ability to apply leverage upon a product as volatile as Bitcoin is a positive development. As soon as this market comes online, I for one will be watching it very closely.

As always, trade smart and for tomorrow!