Key Takeaways
- • CME Group is launching Micro Bitcoin futures (ticker MBT), a smaller-sized contract equal to one-tenth of one bitcoin, or 1/50 the size of the standard Bitcoin futures contract.
- • MBT is USD cash-settled and based on the CME CF Bitcoin Reference Rate (BRR), a once-a-day benchmark taken at 4 p.m. London time from a one-hour window of major spot exchange trade flow.
- • At a bitcoin price of $50,000, one MBT contract carries a notional value of $5,000, with a tick size of five index points, or $0.50 per tick.
- • MBT lists the nearest six consecutive monthly contracts plus the nearest two December contracts, expires on the last Friday of the month, and trades Sunday through Friday, nearly 24 hours a day.
- • The product is positioned for hedging bitcoin price risk or fine-tuning exposure with a lower capital requirement than the standard contract.
Summary
CME Group has launched Micro Bitcoin futures, a smaller-sized contract designed to give market participants a more efficient and cost-effective way to hedge bitcoin price risk or adjust bitcoin exposure. According to CME's product overview, the contract offers the same features as the standard Bitcoin futures contract but requires less capital. CME positions it for participants for whom the standard five-bitcoin contract is too large for their strategy, or whose position has grown too large as bitcoin's price has appreciated.
The contract is equivalent to one-tenth of one bitcoin, making it 1/50 the size of the standard Bitcoin futures contract. CME illustrates the sizing with an example: if bitcoin is priced at $50,000 as tracked by the BRR, the notional value of one Micro Bitcoin futures contract is $5,000. The tick increment is five index points, so a one-tick move equals $0.50 per contract.
Micro Bitcoin futures (MBT) are USD cash-settled against the CME CF Bitcoin Reference Rate. The BRR, per CME, aggregates trade flow from major bitcoin spot exchanges over a one-hour calculation window to produce a once-daily US dollar price for one bitcoin as of 4 p.m. London time. Contracts are listed for the nearest six consecutive monthly expirations, plus the nearest two December contracts, so at any time there are six consecutive months and only two December contracts listed. New contracts are added as nearer ones expire.
Contract expiration follows the standard Bitcoin futures schedule, with contracts expiring on the last Friday of the month and settling in cash to the BRR on the last day of trading. MBT trades Sunday through Friday, nearly 24 hours per day, and is eligible for block trading.
The contract is equivalent to one-tenth of one bitcoin, making it 1/50 the size of the standard Bitcoin futures contract. CME illustrates the sizing with an example: if bitcoin is priced at $50,000 as tracked by the BRR, the notional value of one Micro Bitcoin futures contract is $5,000. The tick increment is five index points, so a one-tick move equals $0.50 per contract.
Micro Bitcoin futures (MBT) are USD cash-settled against the CME CF Bitcoin Reference Rate. The BRR, per CME, aggregates trade flow from major bitcoin spot exchanges over a one-hour calculation window to produce a once-daily US dollar price for one bitcoin as of 4 p.m. London time. Contracts are listed for the nearest six consecutive monthly expirations, plus the nearest two December contracts, so at any time there are six consecutive months and only two December contracts listed. New contracts are added as nearer ones expire.
Contract expiration follows the standard Bitcoin futures schedule, with contracts expiring on the last Friday of the month and settling in cash to the BRR on the last day of trading. MBT trades Sunday through Friday, nearly 24 hours per day, and is eligible for block trading.
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