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Bitcoin Opens on the CBOE

Posted by Joseph Trevisani on Dec 11, 2017 3:13:56 PM

Bitcoin futures began trading in Chicago on Monday morning but the light volume had little effect on the direction or volatility of the popular digital currency.

The Chicago Board Options Exchange inaugrated its bitcoin futures with about 3,000 contracts, about $50 million in notional value, traded by mid-day.  The volume was tiny compared with futures markets in traditional instruments  like gold which can move 400,000 contracts at $125,000 per contract. 

The Chicago Mercantile Exchange (CME) will soon debut it's own version. 

Bitcoin has had an astonishing run higher since mid-September.  On the 18th the currency closed at $4,006.00. By November 8th  it had touched $7,887.99 a gain of 97 percent in three weeks.  After dipping to$5,605.00 to the 13th it has rocketed higher reaching $17,156.94 last Friday. That is an unprecedented 328 percent in eleven weeks.  Last week, in one 40 hour period bitcoin rose 40 percent with commensurate volatility. 

The relative  size of the bit coin market at $300 million is still just a fraction of other estabished instruments  like gold $6 trillion, U.S. equities $25 trillion or the U.S. bond market at $38 trillion. 

While its daily trading volume is dwarfed by the more than $5 trillion that flows through the global currency markets the rapid ascent of bit coin both in value and credibility, the CBOE conrtract is an endorsement likely means that, at least as a speculative instrument , bitcoin is here to stay. 

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets Online Trading

Chart: WWM Alpha Trader

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