NEW YORK: CME Group Inc, the world's largest derivatives exchange operator, began trading bitcoin futures on Sunday, with the contract opening at what is currently its session high and dropping over 6 percent within the first half hour.The CME bitcoin front-month futures opened at $20,650 and have so far traded as low as $19,290 and as high as $20,650 in a session that extends into Monday.The new contract was recently at $19,290 on CME, below the $19,500 reference price set by the exchange for the January contract.The reference price, from which price limits are set, is $19,600 for the February contract, $19,700 for March and $19,900 for June, according to CME.The week-old bitcoin futures contract at the Cboe was last trading at $19,280, up 6.5 percent on the day.Bitcoin recently traded down 1.7 percent on the Bitstamp exchange at $18,640.The launch of bitcoin futures is viewed as a major step in the digital currency's path toward legitimacy that should ease the entry of big institutional investors. "We saw a nice open on light volume, but pretty uneventful so far. I do think we could certainly pick up in volume as Asia begins to open. This is a brand-new asset class and I think perhaps a lot of investors want to sit back and see how this plays out before dipping their toes in this market," Spencer Bogart, partner at Blockchain Capital LLC, said shortly after trading began on Sunday.Volume on CME was recently at 287 contracts. The margin for an S&P 500 futures contract, by contrast, is just 5 percent, analysts said.One futures trader said the average margin for brokers or intermediaries on bitcoin contracts was roughly twice the exchange margins.

Source: The Star December 18, 2017 00:45 UTC