CME Notifies CFTC That It Wants To Double Monthly Bitcoin Futures Spot Position Limit; Approval Needed

The Chicago Mercantile Exchange (CME) Group’s Bitcoin futures saw an average daily volume of $515 million in May 2019 and now they want to traders hold a greater number of open positions at one time.

The announcement says:

“Chicago Mercantile Exchange Inc. hereby notifies the Commodity Futures Trading Commission that it is self-certifying an increase of the spot-month position limits for the Bitcoin Futures contract, commencing with the October 2019 contract month and beyond, as noted in the table below. Specifically, the increased spot-month limits shall go into effect at the close of trading on Monday, September 30, 2019, for the October 2019 contract month and all contract months thereafter. The submission shall become effective Friday, September 27, 2019.”

Essentially, the limit expands from 1,000 contracts per spot month to 2,000 for any single investor. Due to the contracts being worth 5 bitcoins, the change means a trader’s maximum exposure would double from $50 Million to $100 Million.

It will be interesting to see how this new market continues to grow and scale. For CME Group, a major focus is education and making sure their customers have all the tools they need to make solid strategic decisions around crypto.

As Nasdaq notes, the CFTC officially states that lower-risk trading instruments are not subject to limits. Therefore, an agreement to lessen the strict controls for CME could be construed as the regulator having more faith in Bitcoin options than before.

Notably, CME was one of the first Bitcoin futures operators, launching its product in December 2017. Since then, the market has expanded, with the second half of this year set to see a significant increase in overall interest.

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