- CME to launch options on Solana and XRP futures, expanding beyond Bitcoin and Ethereum.
- The new contracts offer flexibility with daily, monthly, and quarterly expiry periods.
- CME’s options could attract institutional capital, enhancing liquidity in altcoin markets.
CME Group, one of the world’s largest derivatives exchanges, is set to launch options on Solana (SOL) and Ripple (XRP) futures on October 13, pending regulatory approval. This move represents a significant expansion beyond Bitcoin and Ethereum in the crypto derivatives market. By introducing options on SOL and XRP, CME aims to offer new tools for institutional investors and traders.
Macro and micro-sized options would be offered in the new options contracts, with an expiry period of 24 hours, monthly, and quarterly, making it easier for traders to control their exposure over altcoins. CME’s move to launch these products comes at a time when both Solana and XRP futures have garnered interest from institutional participants.
Solana futures have already attracted over 540,000 contracts, following their launch earlier this year and $22.3 billion in notional volume. XRP futures have also proven popular, with more than 370,000 contracts, worth of $16.2 billion.
Rising Liquidity and Institutional Demand
Giovanni Vicioso, CME’s global head of cryptocurrency products, pointed to the increasing liquidity in these markets, with record volumes achieved in August. Notably, Solana futures averaged $437 million in daily notional volume, and XRP at $385 million.
The options contracts would provide traders with a better pathway to hedge their interests, giving them flexibility over buying and selling futures contracts at a predetermined price, and also gain exposure to price action in Solana and XRP. Joshua Lim, Global Co-Head of Markets at FalconX, said that the growth of digital asset treasuries and other crypto access vehicles has increased the demand for institutional hedging tools on Solana and XRP.
Moreover, Options could cement Solana and XRP as assets on the institutional radar, reflecting a wider change in the crypto world. Historically, this commentary has centered around Bitcoin and Ethereum, but now the spotlight is on Solana and XRP. Further, this move could prompt more institutional capital to into altcoins, thus creating huge implications for the liquidity of these markets.
Related: Solana ETF Approval Could Come by September: Here’s Why
Cumberland Enhances CME’s Options with TAS
Meanwhile, Cumberland proposed to facilitate CME’s expansion into Solana and XRP options, thus providing a more stable and regulated structure for such big investors, who favor predictability.
CME would also launch a trading at settlement (TAS) feature for Solana and XRP futures. This would enable traders to submit orders at the day’s settlement price, bringing an extra degree of certainty in respect to their trades.
Futures contracts are settled every day at 4 a.m. Eastern time, providing a consistent order-fill time window. TAS would serve to mitigate the erratic price swings traders experience on the same day.
The altcoins are growing and the market for them is deepening, and CME’s new products may change how investors play Solana and XRP. If exposure management tools are accessible, the price behavior of these assets might become predictable, promoting liquidity and prices, thus benefiting institutional investors and retail traders.
