In addition to the crypto-cash markets, the Chicago Mercantile Exchange (CME) offers two distinct Bitcoin futures products: full-sized Bitcoin and Micro Bitcoin futures. Each features a collection of unique advantages designed to cater to both institutional and retail crypto traders.
Read on to learn more about how standardized CME Bitcoin and Micro Bitcoin futures can be valuable additions to your portfolio.
Why Are Standardized Bitcoin Futures Important?
At their core, all exchange-traded futures and options contracts are standardized. This means that each contract is a uniform agreement that governs the interaction between buyers and sellers. Accordingly, the contract guarantees a specific quantity, quality, and expiration date of the underlying asset.
When it comes to the trade of Bitcoin, accessing the market via a standardized contract offers participants two key advantages:
- Security: The CME has invested significantly in building a robust technological framework. For those who value security, the CME is a premier trading venue.
- Guaranteed: When you buy or sell a standardized futures contract, there is no counterparty risk. Transactions are guaranteed by the exchange and subsequent clearinghouse.
If you’ve ever traded cryptos on the cash markets, then you’re aware of nefarious hacking enterprises, exchange regulations, and data breaches. That’s one reason traders turn to formal exchanges such as the CME. The CME’s Bitcoin and Micro Bitcoin futures contracts provide traders an added level of security and stability in the transaction process.
CME Full-Sized Bitcoin Futures: Contract Specifications
CME Bitcoin futures offer traders direct market exposure to the crypto world’s benchmark offering, Bitcoin. Here is a brief look at the contract specs for CME Bitcoin futures:
| Symbol | BTC |
| Contract Size | 5 Bitcoin, priced according to the CME CF Bitcoin Reference Rate (BRR) |
| Quotation | U.S. dollars and cents per Bitcoin |
| Availability | CME Globex |
| Tick Size | 5.00 per Bitcoin |
| Tick Value | $25.00 per tick |
| Expiration | Monthly for six consecutive months and two additional December contracts |
| Settlement | Financially Settled |
From a practical standpoint, CME full-sized BTC futures are relatively expensive to trade. The significant tick value of $25.00 restricts many retail participants from becoming involved with the full-sized contract. In addition, margin requirements are extensive, with both maintenance and intraday margins being listed north of $100,000 per lot. However, for well-capitalized traders, the contract is a great product for gaining exposure to the BTC market.
CME Micro Bitcoin Futures: Contract Specifications
Compared to the full-sized issue, CME Micro Bitcoin futures are far less capital-intensive. In fact, the CME Micro Bitcoin contract is geared toward the average retail trader. Featuring reduced leverage and tick value, the CME Micro Bitcoin offers superior granularity and scalability:
| Symbol | MBT |
| Contract Size | 0.10 Bitcoin, priced at BRR |
| Quotation | U.S. dollars and cents per BTC |
| Availability | CME Globex |
| Tick Size | 5.00 per Bitcoin |
| Tick Value | $0.50 per Bitcoin |
| Expiration | Monthly for six consecutive months and two additional December contracts |
| Settlement | Financially Settled |
As you can see, the MBT contract is much smaller than the full-sized BTC issue. Accordingly, the margin requirements are far more manageable, totaling around $2,000 per lot. Given a $0.50 tick value and lower margins, CME MBT futures offer retail traders more strategic leeway.
Are You Ready to Trade CME Bitcoin Futures?
Without a doubt, the CME MBT futures contract is much more suitable for traders with small to medium capitalizations. Featuring vastly reduced margin requirements and tick values, Micro Bitcoin futures are often the preferred choice among active crypto traders. Of course, for well-capitalized institutional investors, the standard CME BTC contract is ideal.
For more information on the utility and value of Micro Bitcoin futures, check out this free online course, “Getting Started with Micro Bitcoin Futures.” In it, you’ll take a comprehensive look at the CME Group’s Bitcoin and Micro Bitcoin futures and options. Don’t wait—enroll in the course today!
