Cboe Exchange Wants Minimum Prices on Bitcoin Futures

Cboe aims to make changes in bitcoin futures contract price from $10 to $5. The approach comes in a wake of CBOE’s crypto product inaugural.

On April 17th, a new letter was published to a CFTC (Commodity Futures Trading Commission). Matthew McFarland, managing director at CBOE Future Exchange announced a proposed rules amendment. Thus, it will help in reducing the minimum increment on its futures contracts from 10 points ($10) to 5 points ($5).

CBOE’s futures contracts which were launched in December are cash settled futures contracts. These contracts are based on Gemini auction price for bitcoin in US dollars.

McFarland wrote:

“CFE intends to continue to evaluate its experience with the trading in XBT futures and may determine to make future changes relating to XBT futures in light of that experience. The move will have a “positive impact on the market in XBT futures. CFE believes that the impact of the amendment will be beneficial to the public and market participants”.

Eventually, these positive vibes by the firm’s leaders on its crypto products are likely to appreciate its crypto products. For instance, CBOE Global Market’s senior executive argues bitcoin exchange-traded fund will be getting support from a market in a letter to the SEC.

Recently, CBOE Global Market INC also issued a letter concerning the volatility index to their customers. The exchange operator from Chicago said in the letter that:

“Allegations of manipulation are ‘without merit’. If our regulatory efforts were to uncover any manipulation, it would be get out, swiftly and decisively.

On April 18th, in an opening auction, the Single market participant orders were around 212,000 SPX options and additional market participants were 20,000 buy orders options. However, when that buyer’s order combines with other market participants’ offers to buy and sell, 114,000 buy order for SPX options were remaining. Since the Vix price was high at its opening auction.

The executive wrote:

“Based on the orders that were submiting, we believe the auction process functioned as intended. But  notwithstanding that the final settlement value was higher than what market participants may have otherwise expected”.

Furthermore, on April 30th there will improved liquidity in the market by broadening traders’ access to the auction.

They explained,

“This migration should increase the number of participants who can quote during the opening auction which can lead to increased liquidity.The new technology should also “provide more transparency, with more visible quotes, leading to more interaction and ultimately, improved liquidity, including possibly during the auction that determines the settlement price for the Vix.”

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Image Source: Cboe Exchange

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