CBOE to Enter Cryptocurrency Market with Bitcoin Futures & Options

CBOE

The CBOE is going into cryptocurrencies, specifically bitcoin with futures and options. GAME CHANGER. As a former original CBOE member and long time trader I know a big thing when I see (hear) it and this is big. When you can hedge bitcoin you will bring in the institutional crowd and that means credibility (oh yeah, bitcoin is already credible or the CBOE wouldn’t be doing this) and trading opportunities. You can’t beat Chicago for innovation (CME Group, CBOE, etc) so look forward to a whole new trading world. OH, downside: bad for “pure” traders since these products and institutions will make bitcoin markets so efficient the volatility will be crushed. Experience.
(Bill Taylor/CEO)

Chris Concannon’s career in electronic markets has spanned just about every role, from Securities and Exchange Commission attorney to executive positions at the world’s biggest stock exchanges and at trading firm Virtu Financial. Now, the chief operating officer of CBOE Holdings, which owns Chicago Board Options Exchange, is diving into cryptoassets.

It was only a matter of time until Chicago got in on bitcoin. The city has been coming up with things to trade, like pork bellies or onions, since the 19th century, enabling traders to bet on what prices will be at a later date though futures. Compared with cryptoassets’ nascent infrastructure, futures have time-tested plumbing, like custodians to safeguard assets and futures commission merchants (FCMs) to manage trading collateral. And while regulators may view bitcoin as a potentially dirty money-laundering tool, regulated derivatives are well-known to them.

CBOE is working with cryptoasset exchange Gemini to launch a bitcoin future, which is pending regulatory approval. Quartz spoke with Concannon about bitcoin, trading regulations known as the Volcker rule, and initial coin offerings (ICOs), a mix between crowdfunding and cryptocurrency. The conversation has been edited and condensed for clarity…”

Full Story at Quartz.com