Cboe to Launch Bitcoin and Ether Continuous Futures
Cboe announces new continuous futures products for BTC and ETH trading under PBT and PET tickers. This provides new liquid instruments for crypto algo traders and those managing delta-neutral strategies.
Strategy Decoder Editorial · · 3 min read
Key takeaways
- Cboe Futures Exchange (CFE) will introduce continuous Bitcoin (PBT) and Ether (PET) futures, pending regulatory approval.
- These new products are designed to mimic perpetual futures, featuring a daily 'Funding Amount' to align prices with underlying spot assets.
- The offering aims to move cryptocurrency derivatives trading from offshore platforms to a regulated, transparent U.S. market.
- Cash-settled and centrally cleared, the futures will allow for potential cross-margining with existing Cboe crypto products.
- This development expands institutional access to sophisticated crypto hedging and speculative tools, impacting strategy design for quant traders.
Cboe Global Markets is set to introduce continuous futures contracts for both Bitcoin (BTC) and Ether (ETH), a move that could significantly reshape the landscape for institutional engagement in the cryptocurrency derivatives market. These new products, slated for launch on December 15, 2025, pending necessary regulatory clearances, will trade on the Cboe Futures Exchange (CFE) under the tickers PBT and PET.
Bridging the Gap to Regulated Crypto Derivatives
For some time, institutional investors have sought more regulated and transparent avenues for trading cryptocurrency derivatives. Many existing perpetual-style crypto futures operate on platforms outside stringent U.S. regulatory oversight. As reported by Wilmott, Cboe's initiative directly addresses this demand by bringing a perpetual-like structure into a compliant, intermediary-friendly environment.
Rob Hocking, Global Head of Derivatives at Cboe, highlighted the objective of transitioning these products from less regulated offshore venues to a transparent market under regulatory scrutiny. This shift is crucial for attracting traditional financial institutions that require robust regulatory frameworks and operational certainty.
Understanding Continuous Futures Mechanism
The innovative aspect of these new futures lies in their 'continuous' nature, designed to replicate the mechanics of perpetual futures common in the crypto space. Each contract will initially have a 10-year expiration horizon. A key feature is the daily 'Funding Amount' cash adjustment. This mechanism is engineered to maintain a close alignment between the futures contract price and the underlying spot price of Bitcoin or Ether, effectively providing perpetual exposure without the need for constant rollovers associated with traditional, fixed-expiration futures.
This design offers several benefits traditionally found in futures markets, such as tools for volatility management, enhanced tactical trading flexibility, and the ability to establish short positions. The contracts will reference the crypto prices via the Cboe Kaiko Real-Time Rate, ensuring a transparent and verifiable price feed.
Operational Structure and Market Access
These new perpetual-style futures will be cash-settled and leverage the central clearing services of Cboe Clear U.S. This central clearing mechanism significantly mitigates counterparty risk, a critical consideration for institutional participants. Margin requirements will adhere strictly to CFTC rules and regulations, providing transparency and predictability. Additionally, there is potential for cross-margining offsets, allowing firms to manage capital more efficiently across the new continuous futures and Cboe's existing Financially Settled Bitcoin (FBT) and Financially Settled Ether (FET) products.
Trading will be available for 23 hours a day, five days a week (23x5), from Sunday evening to Friday evening ET. This extended trading window mirrors the always-on nature of cryptocurrency markets, offering ample opportunity for market participants to manage positions and react to global events.
Educational Initiatives
To support the launch and encourage adoption, Cboe's Options Institute plans to host educational courses. These sessions, scheduled for December 17, 2025, and January 13, 2026, will be open to the public, aiming to help market participants understand the nuances and trading strategies associated with these new products.
Why it matters for algo traders
The introduction of continuous Bitcoin and Ether futures by Cboe represents a significant evolution in market microstructure for quantitative and algorithmic traders. The 'Funding Amount' mechanism, which aims to keep futures prices anchored to spot, introduces a predictable component that can be modeled and arbitraged. For strategies that rely on basis trading or funding rate arbitrage, these new regulated products offer a more secure and transparent environment compared to their offshore counterparts.
Algorithmic traders can develop strategies around the funding rate dynamics, potentially profiting from premiums or discounts between the futures and spot markets. The cash-settled nature simplifies operations by removing physical delivery concerns, while central clearing reduces operational and counterparty risks that are often deterrents on less regulated exchanges. Furthermore, the 23x5 trading schedule allows for continuous strategy execution and risk management, which is crucial in the volatile crypto markets. The availability of potential cross-margining could also lead to more capital-efficient portfolio management for multi-asset quant funds already trading other Cboe products. This launch provides fresh, regulated instruments for building and backtesting sophisticated delta-neutral or volatility-focused crypto strategies, expanding the investable universe for systematic approaches in digital assets.
Frequently asked questions
What are Cboe's new continuous futures products?
Cboe Global Markets plans to launch continuous Bitcoin (PBT) and Ether (PET) futures, which are derivatives designed to mimic perpetual futures contracts, offering ongoing exposure without traditional expiration dates.
How do continuous futures maintain price alignment with the underlying asset?
These continuous futures include a daily cash adjustment, known as a 'Funding Amount,' which is intended to help keep the futures contract's price closely aligned with the real-time spot price of Bitcoin or Ether.
What are the benefits of these new futures for institutional investors?
These cash-settled, centrally cleared futures offer institutional investors regulated and transparent access to perpetual-style crypto exposure, facilitating volatility management, tactical trading, and short positions within a compliant U.S. market framework.
Tags: crypto futures, cboe, market structure, derivatives
Based on reporting by Wilmott.