This lesson explains Micro Bitcoin Options, including the contract size and what happens to a purchased call or put. Prices in the examples are hypothetical.

What makes the contract Micro?

CME’s U.S. dollar-denominated Micro Bitcoin futures represent 0.1 BTC. An option on that future uses the same underlying quantity. The standard contract represents 5 BTC. The premium quotation is per bitcoin, so multiply it by the quantity to find the contract premium.

For the broader introduction to calls, puts and premiums, start with Bitcoin Options. A Micro contract is a specific futures product, not an informal name for any small option trade.

The example trade

Assume the underlying starts at 100,000 USD per BTC. One option has a strike of 100,000, a premium of 2,000 and a multiplier of 0.1. The total premium is USD 200. Prices and premiums are hypothetical; the call and put use equal premiums to make the comparison easy.

The following results are at expiration, before fees. If exercise creates another position, the calculations assume that position is immediately closed at the stated value.

Buying Micro Bitcoin calls

You buy the call because you expect the underlying price to rise. At 110,000 USD per BTC, the right at the strike is worth (110,000 − 100,000) × 0.1 = USD 1,000. After the premium, your profit is USD 800.

At 100,000 or below, the call expires without intrinsic value and loses its USD 200 premium. Its expiration breakeven is 102,000 USD per BTC. At 101,000, the price has risen but the trade still loses USD 100.

Buying Micro Bitcoin puts

If you expect a fall instead, the put costs USD 200 in this example. At 90,000 USD per BTC, it is worth (100,000 − 90,000) × 0.1 = USD 1,000. Your profit is USD 800 after the premium.

At 100,000 or above, the put loses its entire premium. Its expiration breakeven is 98,000 USD per BTC. A smaller fall to 99,000 still leaves a loss of USD 100.

Before expiration

You can sell an option to close when a market is available. Its resale value also depends on time remaining and implied volatility, so the expiration breakevens do not determine every earlier trading result.

The purchased option can lose its full premium. Exercise may create a separate position or funding obligation. Selling an uncovered option can produce losses larger than the premium received.

What happens at expiration?

These CME options are European-style and exercise into the specified futures. Monthly delivered futures immediately settle to cash; weekly series can leave an open futures position. Check the selected option and futures dates together.

Micro futures are not a delivery of coins to a wallet. Read Crypto Options Settlement and Risks for the distinction between an option’s expiry value and the obligations of a resulting position.