Margined Bitcoin and Ethereum Futures Launching on Cboe in January

Cboe Digital today announced plans for margin Bitcoin and Ethereum futures.

The move will mean the platform will become the first to offer both spot and leveraged derivatives trading in one place, Monday’s announcement said.

A margined futures contract requires the buyer and seller to deposit an initial margin and maintain a minimum margin balance as long as the contract remains open. Futures contracts themselves are a type of derivative that allow investors to bet on the future price movements of an asset.

Cboe Digital is the digital asset arm of the Chicago Board Options Exchange (CBOE), which accounts for roughly 34% of total U.S. options volume according to the company’s recent earnings report. The margin Bitcoin and Ethereum futures will launch on January 11, while physically delivered products will come at a later date, subject to regulatory approvals, it continued.

Futures in the world of derivatives trading are agreements that obligate a trader to buy or sell an asset at a specific time, quantity and price.

Cboe Digital already offers crypto futures but this product will allow traders to use leverage—or borrowed funds to make bets with the hope of getting bigger returns.

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President of Cboe Digital John Palmer said: “Futures have long served as valuable hedging instruments in the traditional financial markets, and we couldn't be more excited to extend access to this tool further into the digital assets markets and offer margined trading for our customers.”

A number of trading firms such as B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, Marex, StoneX Financial, Talos will support the launch by providing liquidity.

Although the futures market is big, several Ethereum futures exchange-traded funds (ETFs) started trading in the United States for the first time last month but got off to a slow start.