The world's largest futures exchange wants to guard against extreme volatility in its planned bitcoin futures product.
CME will implement special price fluctuation limits at 7 percent and 13 percent above or below the prior settlement price, and prevent trading outside the 20 percent range, according to details the exchange released Tuesday afternoon.
The trading ranges are similar to what is allowed for U.S. stock index futures. But the limits could be more relevant for the notoriously volatile digital currency and could ease investor concerns about investing in the bitcoin product.
Bitcoin can swing several hundred dollars in one day. In just the last few days, bitcoin hit a record high of $7,601.53 Sunday, then dropped below $7,000 before recovering to $7,500 Wednesday morning, according to CoinDesk. In September, bitcoin crashed about 40 percent from above $5,000 to below $3,000 in about two weeks.
That said, some analysts have pointed out that intraday volatility in bitcoin has fallen since the early days of the digital currency.
CME announced last week it is launching bitcoin futures by the end of the year, pending regulatory review. CME Chairman and CEO Terry Duffy said on CNBC's "Closing Bell" after the announcement that he is "confident" the CME's self-certification process at the U.S. Commodity Futures Trading Commission and full application process will go through.
A spokesman for the CFTC did not immediately respond to a CNBC request for comment.
Other details now available on CME's website about the bitcoin futures contract include the months for the initial listing: December 2017, January 2018, February 2018 and March 2018. Contracts expire at 4 p.m. London time, typically 11 a.m. ET, on the last Friday of the contract month, according to CME's website.
The website also shows trading hours are scheduled for 6 p.m. ET to 5 p.m., Sunday to Friday on CME's electronic trading system Globex and CME's over-the-counter market ClearPort.