Bitcoin margins raised by CME in preparation for volatility

By Leia Klingel
Published December 13, 2017
FOXBusiness

The CME has increased its margin requirements for bitcoin futures to 43% ahead of the launch, up from 35%.

“Margins for CME bitcoin futures are being increased to 43% for launch as a result of the normal review of market volatility to ensure adequate collateral coverage,” according to a release from the CME.

The move comes ahead of the Dec. 18 debut of bitcoin futures trading on the CME. This week, the CBOE debuted its bitcoin futures contract and it was a wild ride. According to Reuters, the most-active contract swung by 20% at one point to trigger a trading halt.

“We saw pretty volatile overnight markets, a lot of price moves, but everything worked as it should,” CBOE Chief Executive Ed Tilly said.

According to the CBOE, 4,127 contracts changed hands in their first day of trading. Futures debuted Sunday, at 5:00 p.m. CT, and the first trading session closed at 3:15 p.m. CT the following day. The CBOE was the first U.S. exchange to offer bitcoin futures.

The CBOE and CME availability of bitcoin futures was seen as a major step for the cryptocurrency, giving traders access to bitcoin through regulated exchanges, with the exchanges implementing their trading rules and regulations, such as margins and circuit breakers, on their bitcoin futures contracts.