TD Ameritrade on Friday said it would open trading for the recently launched bitcoin futures contract on Cboe Group Inc., following what it said was “standard protocol” for granting access to any futures product.
The online broker “has been actively monitoring activity around [the] CBOE Bitcoin futures contract, following our standard protocol for giving approved clients access to any futures product,” spokeswoman Alyson Nikulicz wrote in a statement. “At this point, we believe the market is showing signs of adequate liquidity for CBOE product.”
While the futures will open for trading on Sunday evening, TD’s trade won’t open until Monday, Dec. 18, the company said. “In order to mitigate risk to the market and to our clients,” it is requiring a minimum balance of $25,000 in place to be eligible to trade the futures XBTF8, +7.68% It is also increasing the margin requirement to 1.5 times the Cboe mandated margin requirement.
The margin requirement on the Cboe is 44% of the daily settlement price, with TD Ameritrade’s requirement meaning that an investor would need to put up about $12,760 in collateral on a single contract of bitcoin based on the January contract’s settlement at $18,105 on Friday.
Assuming the response is positive, Nikulicz wrote, TD Ameritrade AMTD, +2.16% will continue to roll out trading on the futures to approved client accounts in waves. The spokeswoman said there has been “increased client demand” for access.
“We are treating the Bitcoin futures products as we would any other futures products, where we ensure the marketplace has the proper liquidity before offering to our clients,” she wrote in a statement.
Related: ‘We may be stupid’ for waiting on bitcoin futures, NYSE owner says
A futures contract allows a trader to place a leveraged bet on whether the price of the underlying asset will move higher or lower before the contract expires. Bitcoin futures will be cash settled, meaning no bitcoins will actually change hands when a contract expires. So far, trading volumes on the Cboe have been relatively low.
Learn more: Bitcoin futures: Here’s what you need to know
Bitcoin BTCUSD, +2.22% hit a record of $17,872.56 on Friday, supported by the news that CME Group Inc. CME, +0.43% set to follow rival Cboe CBOE, +0.25% with a bitcoin futures contract on Sunday. The digital currency has been on a massive run this year, having ended 2016 below at $968.23, according to research and data site Coindesk.com.
Read: In one chart, here’s how much it costs to mine bitcoin in your state