CME Group has plans to launch options on Bloomberg Commodity Index (BCOM) futures on September 23, the derivatives marketplace announced.
Having extended its license with Bloomberg for commodity index products through 2027, CME Group seeks to provide market participants a new way to access broad market exposure with options on BCOM futures, which offer additional flexibility to express a range of views on commodity market movements.
BCOM represents 22 commodities
The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Index Services Limited. BCOM provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments.
The index is made up of 24 exchange-traded futures on physical commodities, representing 22 commodities which are weighted to account for economic significance and market liquidity. Weighting restrictions on individual commodities and commodity groups promote diversification.
BCOM futures’ open interest is up by 88%
Paul Woolman, Global Head of Equity Index Products at CME Group, said: “We are pleased to announce the addition of options on BCOM futures to our suite of commodity index products, as well as the extension of our BCOM license renewal to continue to offer these important risk management tools. These new options contracts will build on the growing strength and liquidity of our existing BCOM futures contracts, which have seen a surge in volume and open interest in 2024 – up more than 12% and 88% year-over-year, respectively. The addition of options on BCOM futures will also offer greater potential capital and margin efficiency to commodity index trading strategies while providing similar exposure to OTC swaps.”
Umesh Gajria, Global Head of Index Linked Products, Bloomberg Index Services Limited, commented: “Bloomberg is proud to see the continued growth and popularity of our flagship BCOM index which is backed by exceptional research and data. This is evidenced by CME Group’s launch of options on BCOM futures, extending their existing product suite offering investors additional opportunities to hedge and diversify their portfolios.”
