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Understanding CME Bitcoin and Micro Bitcoin Futures Contract Specifications

September 21, 2021 by Daniels Trading| Tips & Strategies

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!

Getting Started with Micro Bitcoin Futures

Filed Under: Tips & Strategies

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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