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Bitcoin Futures by the CME


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Bitcoin Futures by the CME

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  #1 (permalink)
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Following Mattz's advice, CME has announced Bitcoin futures. I hope they keep they make it a very granular, small contract, for small traders. $1 per point would be suitable, I think. It needs reduced fees too, I think though. This will also be interesting because it may allow for BTC holders the ability to arbitrage the BTC cash with the futures product.

CF Bitcoin Real Time Index and Spot Price

The other futures market I know of, is not CFTC regulated, BITMEX, is run by a very bright guy, Arthur Hayes. Some of his arb strategies might be suitable for this product, as well. One of the products BITMEX offers is a perpetual swap. It has the advantage of tracking the spot price: this might be another consideration. There is also Bitfinex which is larger.

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  #2 (permalink)
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fyi:

CME Group Announces Launch of Bitcoin Futures

CHICAGO, Oct. 31, 2017 /PRNewswire/ -- CME Group (CME), the world's leading and most diverse derivatives marketplace, today announced it intends to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods.

The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Bitcoin futures will be listed on and subject to the rules of CME.
...

More information:
CF Bitcoin Real Time Index and Spot Price

@mattz : Done.

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  #3 (permalink)
SpeculatorSeth
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Excellent. Now I'll have an easy way to short it when the crash happens. Assuming the regulators approve it that is.

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  #4 (permalink)
 
 
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tpredictor View Post
There is also Bitfinex which is larger.

Can you PLEASE stop pushing these unregulated OTC entities that have ZERO regulatory oversight?
https://medium.com/@bitfinexed/wash-trading-bitcoin-how-bitfinex-benefits-from-fraudulent-trading-8bd66be73215
https://medium.com/@bitfinexed/fake-it-till-you-make-it-when-bitfinex-themselves-used-to-spoof-their-entire-orderbook-18294585338

Matt Z
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  #5 (permalink)
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choke35 View Post
fyi:

CME Group Announces Launch of Bitcoin Futures

CHICAGO, Oct. 31, 2017 /PRNewswire/ -- CME Group (CME), the world's leading and most diverse derivatives marketplace, today announced it intends to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods.

The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Bitcoin futures will be listed on and subject to the rules of CME.
...

More information:
CF Bitcoin Real Time Index and Spot Price

@mattz : Done.

nice ....guess Santa is coming sometime in the 4th Qtr

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  #6 (permalink)
 
 
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paps View Post
nice ....guess Santa is coming sometime in the 4th Qtr

I heard the distribution of gifts will be done via a Blockchain. No more chimnies.

MattZ
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  #7 (permalink)
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@mattz I am not pushing anything. I only mentioned Bitfinex because it was mentioned in the white paper that describes how the CME futures price will be calculated. The exact exchanges used can change over time according to the white paper. I only mentioned Bitmex because Arthur comes across as a really bright guy in Youtube videos I have seen. In order to be 100% clear, I do not work for any broker, have no affiliate marketing or other financial interest, and have no interest in any broker whatsoever. I also do not and have never recommended any BTC trading product, exchange, or the like whatsoever.

However, I do think Arthur's perpetual swap idea is interesting but do not fully understand it. It sounds like it is more of a vehicle for shorting then for going long from what I understand. However, it would be nice if there were a futures-like product that didn't have the inherent pricing problems that futures have. When I mentioned it, I was thinking that it is unlikely there would be any interest for expiry beyond the front month given how difficult BTC is to price/predict.

What I imagine the futures product could be used for would be for large BTC holders, they will be able to keep their BTC in cold storage and will be able to use the futures to hedge some of the price risk without exposing their actual BTC. However, I'm still not sure how this will work without some sort of options hedging or other mechanism.

https://www.cmegroup.com/trading/files/bitcoin-white-paper.pdf

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  #8 (permalink)
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Will the help the bubble or not?


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  #9 (permalink)
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@RandBots Shorting BTC for anything other then a short term trade would most-likely be a huge mistake. It is mostly owned and controlled by a few rich people and it is programmed to become more scarce. All they have to do is maintain current prices over time before most of the talking heads and pundits will start to say that BTC is more or less fairly valued. Every day that BTC doesn't collapse then you have more history where it has maintained value.

This will most likely have the effect of bringing in more big money. The big money is not invested. They will want to invest just 1% or 2% likely as a hedge or for uncorrelated returns. That would push a huge amount of money into BTC. Even if BTC is a bubble, then it is likely a highly mean reverting one. This means that any collapse is likely to be followed by a serious snapback rally. The drift and structural design means that it is likely to slowly rise over time.

This will bring a lot of more vendors into the ecosystem and gives BTC more legitimacy. There is really zero negative here. It also gives big traders a way to hedge their portfolios, which they will keep in cold storage. I am predicting BTC will rally to 6700-6800 perhaps within 48 hours. There is very little liquidity available above the current highs. Historically, a rally to 7400 would be not be statistically unlikely.

The only "negative" would be if the futures market comes back in a few months and reports they weren't able to get approval but by then BTC could be 50% higher. This has happened I think, not able to get approval, with some other products. So it still must be factored in. The trade now is to figure out if you think the market has appropriately discounted this information in light of the probability of approval or not.

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  #10 (permalink)
Legendary Market Wizard
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Seeking Alpha : - Andrew Hecht
Two Issues The CFTC And CME Would Be Wise To Consider Before Letting Bitcoin Futures Loose

https://seekingalpha.com/article/4120137-two-issues-cftc-cme-wise-consider-letting-bitcoin-futures-loose

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SMCJB View Post
Seeking Alpha : - Andrew Hecht
Two Issues The CFTC And CME Would Be Wise To Consider Before Letting Bitcoin Futures Loose

https://seekingalpha.com/article/4120137-two-issues-cftc-cme-wise-consider-letting-bitcoin-futures-loose

The CME has an arm called "CME Ventures" where they invest or have interest to the best of my understanding in other companies. If you take a look at the link: CME Ventures you will see that they have interest in companies with digital assets. So the decision to launch BitcoinFutures is not one they did on a limb.

The question is liquidity. Could they be competitive with all the OTC exchanges? I think if they build the right leverage than it could be a success. time will tell.

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  #12 (permalink)
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I think CME should focus on why traders around the globe are trading BTC instead of CME products. The answer is trivial: CME products too large and some of the more quantitative strategies like arb aren't open to all due to size/speed/etc complexities. My opinion is the CME should work on reducing costs and introducing products that wanna-be professionals can trade. There are way more wanna-be professionals then professionals.

I know they can "fix" their existing products for the small speculator. As for BTC, I think it is a tough challenge. You can't assume that the volatility will stay high. You can't assume the price will stay where it is. Because it is a synthetic, you need to use a consistent methodology for system traders. And BTC trades 24x7. Also, at GDAX I can trade cost free. So, they're going to really have to get everything right to become the preferred trading venue. I don't know the answer to this problem but I hope they make it work for small traders. If they make a great product I will be very interested to trade it. I am going to be shifting my trading effort to the BTC market.

It is a lot different then ES. It trades with pure emotion. I notice, also, it trades on a different clock time. You have a few hours per day to trade the ES typically then it dies. The clock time of BTC is more pure and way faster. It feels like years of trading can get compressed into days. I've started to think like the idea of trying to collect/earn more coins.

I notice something else too that is difficult to exactly explain but BTC at like GDAX will trade in a 1 cent band then explode up or down. So, I feel like the opportunities for trading it are different and probably more centered around price-time then clock-time. Somewhat difficult for me to explain but a 1 minute BTC chart is more similar to a 1 second ES chart. Perhaps this a result of being a low volatility market or the tick size. I'm not sure really.

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@tpredictor I don't think the CME is going to build the new Bitcoin Futures for the very small speculator. First, as Bitcoin starting to grow as an asset class, the Futures contacts would serve as a hedge for institutional investing. Second, if the leverage is small, it will not attract speculators. You are right there are more non-pros than pros, but the volume that the pros could provide would dwarf what non-pros provide, and I am not even going to mention the frequency. Third, if you look at some of the microcontacts the CME tried to implement, it was a complete failure by all standards. Gold, Currency, and grains.

One thing I agree with you is the OTC markets competition. But, this is specifically why I think the exchange will offer much higher leverage. As an exchange, they do not have to take the same risks as OTC Market Makers so they can provide higher leverage.

I do not think that higher leverage is always healthy financially, but that is what speculators both small and large are attracted to.

If I get to guess the size, just based on intuition, I think it may be $5 per point. But if it was lower, or higher, I would not be surprised.

Thanks,
Matt Z
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  #14 (permalink)
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the CME product will give me the comfort level I need to trade Bitcoin futures....and contract volume sweetens the deal. I just don't trust the other exchanges, been burned before.

just my .02

have a great weekend!

Johnny

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I think the reason that there is more trader on bitcoin and crypt and the reason and simple any one can make profit and win money the second reason know that trader are human do not know robots or algo so more easy to trade and win money on a movement on trade to win money and not for loss money so on a bullish movement everyone wins, that all

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tpredictor View Post
I think CME should focus on why traders around the globe are trading BTC instead of CME products. The answer is trivial: CME products too large and some of the more quantitative strategies like arb aren't open to all due to size/speed/etc complexities.

Maybe I miss understand you, but that sounds like you would like a small market with no professionals, so that you can then be/try to be/perform the role of a professional, but on a much smaller scale?

tpredictor View Post
My opinion is the CME should work on reducing costs and introducing products that wanna-be professionals can trade. There are way more wanna-be professionals then professionals.

I think @mattz's answer to this is spot on. But are you serious about costs?

CME charges
  • $1.40 on a $50,000 crude contract (0.000028%).
  • $1.18 on a $125,000 S&P 500 contract (0.0000094%)
  • $0.95 on a $1,000,000 Eurodollar contract (0.00000095%)
While
  • Coinbase charges Americans 0.005% plus 0.0149% to deposit money and 0.0149% to withdraw money

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  #17 (permalink)
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@SMCJB

First, you missed my point and second you are making up stuff that I did not say or think. So, yes you misunderstand me. I'd prefer that both small speculators and large speculators trade in the same venue. But, I did not explain what I was thinking well. The mention of stat arb was just a fleeting thought and not central. It was related to my thought that I don't like externalities as a trader. However exchanges tend to like introducing externalities. A good example of an externality would be a volume discount for large traders. At GDAX for example, large traders -- probably associated with exchange, get a volume rebate on their market orders. This allows them to negatively select limit orders at reduced cost. I only mentioned stat arb in relation to that and thinking about if there were certain barriers of entry to certain strategies, if those could be reduced, to all participants then it would encourage volume. It was never about what I want to do.

Also, I was trying to emphasize that the CME already had good products if they'd simply introduce products suitable for the small speculator.

Also, I never said leverage, even high leverage, was a problem. Obviously, leverage is very useful for any trader. The problem is the low granularity, the poor divisibility, of futures contracts. There is no real reason for futures to have large notional values. I suspect it is merely a forgotten by-product that in the past they needed to counts or whatever by hand. In that case, large notional values are useful because it makes it easier to count. Today, everything is computerized so the large notional values merely serve as a barrier of entry to small speculators. The only other reason large contracts are useful is when you have high fixed costs or fees. I'm not referring just to CME fees but also futures brokers. If you reduce/remove the fees, then there is no rational reason to want to trade put on 1 large lot versus 5 smaller lots. In fact, all things equal it is always better to trade a smaller contract. Of course, you don't want to trade pennies because then it become a network issue but we have very fast networks today. But yes I was also serious about costs because if you have high fixed costs then trading a large contract, if you have a large account, yields a lot more profit. This is why you will notice that a lot of systematic strategies will focus on products that have big tick values. If the fixed costs, i.e broker costs, are high then you need the large tick.

But based on the above analysis, it is rational to conclude that institutions should not really care one way or another what the notional value of the contract is. But, who should care based on a rational analysis? Brokers, middlemen, etc. The only possible risk of a small contract is and this is hypothetical maybe it allows for HFT to game the system by pulling orders or whatever. But that's an HFT problem. Also, the notional value doesn't dictate the leverage in itself, the minimum margin determines that. The notional value or "low granularity" merely determines the minimum size you must trade.

My real point was that most futures traders are trying to trade 2k, 3k, and maybe even 5k. A 3% risk on 3k account is $90. Because risk and reward are related. It basically means keeping risk to 3% per trade or less means the small futures trader is going to have to try to scalp. Scalping today is difficult because of the HFT.

Now, let's say a trader can actually make even $60 per day, in a market like BTC that trades 24x7. Trading just 70% of available with average $60 days produces a return of ~$15,000. At $80 per day, you get ~$20,000. One does not need to make a lot of money per trade to build an account provided there is plenty of regular opportunity. So, that was my only real point. Of course, one can do the same in futures if you are selective and if the opportunity is present. But, typically speaking, trading futures, you will need to risk more then 3% if you're only trading a 2k-3k account. Even on something like the ES, a 2 point risk is $100. Most of the ES systems I've seen require a lot more then $100 risk. You're probably looking at say minimum $200, $250, $300 risk per trade for a systematic ES trading system. One of my better systems used an even larger stop and it was very profitable but most of us don't want to risk that much. On a 2k or 3k account, that's 10% account. But, I've already shown that it is possible to build an account with a very low return per day.
And, you are correct there are products/venues that have smaller contracts or products. The problem with those products is they are typically always mediated by an additional layer or broker which means more fees and the trader gives up more edge.

Let's imagine for a moment each point in the ES was worth say $10 vs $50. There are huge advantages. Most discretionary traders can profit from more types of markets then system traders but their average profit per trade is lower. So, the discretionary trader can take a lot more trades. They can build their account up gradually. It is a big advantage for a system trader too and even for a "system subscriber". As a system developer, what's worth the most of all? Your time. If the contracts are smaller, you can deploy to live faster and save development time. By deploying to live faster, you gather more relevant data and you speed up the cycle. From my experience, most ES systems take maybe around $7,000-$10,000 capital. If you made the value 1/5th then you could deploy to live with only $500 to say $1000.

What else? Also for the discretionary trader, the large notional values make it risky to try unfamiliar futures products without first trading on simulator. If the sizes were small though, you could move from say ES to something different like natural gas or crude oil-- without having to have extensive sim experience first. Once you are comfortable then you increase the leverage and only suitable for the trades. It would also mean you could trade a lot of different contracts with even a small account. Again, there is no technical reason it is not possible to do this today.

Also, you can transfer into your wallet at Coinbase and then transfer directly to GDAX. There is no cost to that if you use bank transfer. You are confusing buying BTC for use purposes or credit card vs trading. You are also confusing with transferring money into the account vs actually trading it. Most futures traders wire the money in-- so that's not free by any means. Limit orders are free. Also, again you misunderstood what I was referring too. I was referring to the fact if you drop the contract value then you must reduce the associated costs or it won't help. I was not even referring or thinking to other trading venues.

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  #18 (permalink)
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Just a citation from one of @tigertrader 's favorite blogs - Daily Speculations:

Quote:
"John Netto writes:
There will be a mini-BTC

Henrik Andersson writes:

I'm also curious so I called CME and asked. Each contract will represent 1 Bitcoin and when the contract settles you will receive the cash amount of the Bitcoin Reference Rate. "

Both authors are regular contributors of Vic Niederhoffer's publications, Andersson mainly regarding BTC.

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  #19 (permalink)
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Quoting 
it is programmed to become more scarce

Not before you die.

Gold is programmed to be more scarce, by nature.

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I do a little light trading on Bittrex and Bitfinex and since they dont have shorting there as a option yet thats all I will use them for . mostly I just keep my online poker playing money there as it is illegal for US banks to transfer money to poker sites I dont see it breaking any laws in that sense. Any way I just wanted to say that most people see Bitcoin as some sort of anomaly still like the internet was in 1992 where most people thought oh thats cute the geeks got a new toy to play with and its a fad that with fade out very soon. We all know what happend in that scenario. Unless there is some sort of unilateral goverment intervention making these crypto coins illegal you may be wittnessing the new world currency in its birth stage. There are over 1500 different types of cryto coins you can trade at the moment and new ones added weekly the most popular one we all know as Bitcoin is about $7500 per coin ATM .. and this could drop or explode in value significantly for many reasons. But one thing that is sure the pace of businesses and industries that are adapting the crypto's into there way of doing business is increasing at a steady rate. The main hurdle i see for crypto's to get past is hacking theft, There is No company, goverment or program written that make this type of currency safer to have than the paper dollars printed everywhere.

Anyway that all have to say on that
Quantismo

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@tpredictor in response to your post responding to @SMCJB

After reading your post, and many others, I can explicitly say you are dealing in a world of impractical idealism.
You create theoretical assumptions, treat them as universal facts, and build more premises on top of them.
I have been doing this for a long time, and you present a small fraction of the Futures world. The CME which has built the largest and most liquid Futures exchange. They serve the interests of many players, and if yours don't fit, well maybe you trade another asset class.

Let's deal in a world of facts. If we don't deal with practical issues, we are going to create problems, not progress.
CME is not going to change the size of the contracts and pricing so let's stop discussing it. Let's consider technologies for execution and methods for implementation once the Bitcoin Futures contracts are launched.

Capital is essential when you start trading. But, a realistic approach, one where you accept specific variables are fixed and can not be changed may lead traders down the right analysis and not waste time with what's unfair. Realism is a scarce commodity.

What many traders or potential futures traders miss are the right and realistic direction. Sadly, as I mentioned in other threads, 3rd party vendors created a world of virtual reality for traders where the impossible is possible. If we can put traders on the right track, I am sure many could have a better chance of success.

One of the reasons that I requested a thread specific to this topic was because I wanted to discuss the CME contract, not all the OTC that is around. Again, let's see what will happen when the contract launches. Maybe it will be an epic failure, or perhaps it will be a remarkable success stealing all the large traders from those OTC players. They could only wish they had the CME's capacity for execution and fairness in dealing.

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Matt Z
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Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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mattz View Post
perhaps it will be a remarkable success stealing all the large traders from those OTC players.

I believe that any large fish would have to be in both markets. If all of the large players decide to play in the futures instead of the exchanges, then the exchanges are just left with small fish and arbitrage robots. That becomes a problem when it's a cash settled market, and the action in the exchanges are what ultimately decides the price.

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I believe that any large fish would have to be in both markets. If all of the large players decide to play in the futures instead of the exchanges, then the exchanges are just left with small fish and arbitrage robots. That becomes a problem when it's a cash settled market, and the action in the exchanges are what ultimately decides the price.


This is just my opinion from what I read. It seems that in the cash market most large players are long-term holders. This is reflected in the additional services that the exchanges offer such as cold storage of Coins.

Many of guys that do open accounts on the cash exchanges are mainly very small spec guys who use leverage and/or just jump from one exchange to another trying to pick a winning ICO or just playing what moves most. They all missed out on Bitcoin and now they buying coins with the hope it is the next big thing. 99% of them are scams because the coin has zero utility and has nothing to do with the project.

I did contact the CME today via email to see if I can get further info on this contract.

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It seems that in the cash market most large players are long-term holders. This is reflected in the additional services that the exchanges offer such as cold storage of Coins.

Well this is certainly true, but that's the other half of the problem! There's not really any derivatives to speak of, and you'd have to borrow bitcoins to short it (very difficult). The investors believe this is the future of money, and therefore there is no incentive to sell it. So you end up with a huuuuge imbalance between buyers and sellers. Prices get driven up insanely high whenever new demand comes in, like those buying to play the upcoming fork. What I wouldn't give for a put option!

A future would be a big change because it would introduce professional market makers, and that would completely change the dynamic. This would drive new players onto the bitcoin exchanges to arbitrage with the futures, and it could change the balance of power with price.

But we already know the key details for the contract specs. That's why it being cashed settled is a big deal. If it was physical delivery then the interaction would be different with the bitcoin exchanges. You would maybe even see people leave the exchanges and just trade the future. Instead I'd expect to see a ton of robots come in.

At the same time these issues could just be reasons for the regulators to not approve it.

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Bitcoin is so fragmented, and presumably inefficient compared to a mature futures product. So hypothetically speaking, what is going to happen if someone like JPM start selling BTC futures with crazy large size. How will this effective the underlying price at each BTC exchange?

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Looks like 5 bitcoins per contract.

$25 minimum tick.

https://www.google.com/amp/s/amp.businessinsider.com/bitcoin-futures-cme-terms-2017-11
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https://www.cmegroup.com/trading/bitcoin-futures.html

Contract Specifications

Contract Unit
5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR)

Minimum Price Fluctuation
Outright: $5.00 per bitcoin = $25.00 per contract
Calendar Spread and Basis Trade at Index Close (BTIC): $1.00 per bitcoin = $5.00 per contract

Trading Hours
CME Globex and CME ClearPort: 5:00 p.m. – 4:00 p.m. CT Sunday – Friday
BTIC: 5:00 p.m. - 10:00 a.m. or 11:00 a.m. CT (4:00 p.m. London Time) Sunday - Friday

Product Code
Outright: BTC
BTIC: BTB

Listing Cycle
Nearest 2 months in the March Quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest 2 "serial" months not in the March Quarterly cycle.

Contract months for initial listing:
Dec 2017, Jan 2018, Feb 2018, Mar 2018.

Termination of Trading
Last Day of Trading is the last Friday of contract month.
Trading in expiring futures terminates at 4:00 p.m. London time on Last Day of Trading.

Position Limits
Spot Position Limits are set at 1,000 contracts. A position accountability level of 5,000 contracts will be applied to positions in single months outside the spot month and in all months combined. The reportable level will be 25 contracts.

Block Minimum
5 contracts

Price Limits
Price limits for a given Business Day are made by reference to the most recent Bitcoin Futures settlement price, settled at 4:00 p.m. London time each Business Day.
Special price fluctuation limits equal to 7% above and below prior settlement price and 13% above and below prior settlement price and a price limit of 20% above or below the previous settlement price. Trading will not be permitted outside the 20% above and below prior settlement price.

Settlement
Cash settled by reference to Final Settlement Price, equal to the CME CF Bitcoin Reference Rate (BRR) on Last Day of Trading.

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  #28 (permalink)
 
 
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@Devil Man Can you please share the CME link?

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Legendary Capt. Johnny Jameson
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Sorry @mattz here it is:

Coming Soon: Bitcoin Futures

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mattz View Post
@Devil Man Can you please share the CME link?

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@mattz would you mind giving us your thoughts once you had time to review the specs?

thanks!

Johnny

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Thank you! Did they publish margin, I can't see that. Did I miss something?

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mattz View Post
Thank you! Did they publish margin, I can't see that. Did I miss something?

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nope I haven't seen it and I can't find it anywhere on the CME's site

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Devil Man View Post
@mattz would you mind giving us your thoughts once you had time to review the specs?

thanks!

Johnny

Would love to help. What do you specifically wish to know or curious about?

Matt Z
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mattz View Post
Would love to help. What do you specifically wish to know or curious about?

Matt Z
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just your general thoughts about how they built it compared to say ES and 6E?

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just your general thoughts about how they built it compared to say ES and 6E?

Understood. Will give it some thought and try to attack it from the not so obvious angle.

Matt Z
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Understood. Will give it some thought and try to attack from the not so obvious angle.

Matt Z
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roger that thanks bud!

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SpeculatorSeth
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Margin is based on SPAN ratios so you could calculate it exactly. I believe it's something like a 3rd deviation move on a daily basis. When you factor in a tick size of $25 per $1 move in the index that's like $25k. Yeah, that's just a little more than insane. Am I reading this right??

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  #38 (permalink)
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Neo1 View Post
what is going to happen if someone like JPM start selling BTC futures with crazy large size. How will this effective the underlying price at each BTC exchange?


Well, what happens when JPM sells naked gold futures in crazy large size?

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Well, what happens when JPM sells naked gold futures in crazy large size?

I dont know what ripple effect that has @suko. Care to explain?

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Legendary Capt. Johnny Jameson
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this is the kind of stuff that concerns me about Bitcoin:

A crypto user deleted some code in a popular cryptocurrency wallet Parity - Business Insider

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Well, what happens when JPM sells naked gold futures in crazy large size?


I don't trade /GC, so you gold traders can correct me, by my understanding is that these paper gold futures lead the spot price. Same for silver. There is vastly more paper gold and silver than there is physical. This is supposedly how they keep driving down the price of gold and silver.

Since the CME BTC futures will be a cash settled future, you could call it "paper Bitcoin", just like paper gold and paper silver. The nominal amount of BITCOIN futures will be vastly greater than the physical.

Once the CME futures open, Jamie Dimon rules Bitcoin.

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  #42 (permalink)
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Contract spec:

https://www.cmegroup.com/trading/bitcoin-futures.htm

Contract Unit 5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR)

Minimum Price Fluctuation: Outright: $5.00 per bitcoin = $25.00 per contract

Product Code: BTIC: BTB

Cash settled

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  #43 (permalink)
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I don't see myself trading the futures, but soon after this there will be options on futures and there should be a lot of juice in those. So I am interested.

Also, based on the futures they can create legit ETFs just like the vol products -- leveraged, inverse, long duration, etc. And then there will be options on the ETFs, and I will want to trade these.

It's all good.


Kinda reminds me of Deadwood when George Hearst showed up, though.

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suko View Post
I don't trade /GC, so you gold traders can correct me, by my understanding is that these paper gold futures lead the spot price. Same for silver. There is vastly more paper gold and silver than there is physical. This is supposedly how they keep driving down the price of gold and silver.

Since the CME BTC futures will be a cash settled future, you could call it "paper Bitcoin", just like paper gold and paper silver. The nominal amount of BITCOIN futures will be vastly greater than the physical.

Once the CME futures open, Jamie Dimon rules Bitcoin.

GC is a deliverable, not cash settled.

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suko View Post
Contract spec:

https://www.cmegroup.com/trading/bitcoin-futures.htm

Contract Unit 5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR)

Minimum Price Fluctuation: Outright: $5.00 per bitcoin = $25.00 per contract

Product Code: BTIC: BTB

Cash settled

Thanks @suko.
Link Coming Soon: Bitcoin Futures (needs the l on html)
So right now a $32k notional contract.

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yes gold GC are deliverable even crud oil deliverable, but for bitcoin that and just digital value of binary 10101 but it is deliverable ?? >>

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SMCJB View Post
Thanks @suko.
Link Coming Soon: Bitcoin Futures (needs the l on html)
So right now a $32k notional contract.

So if I have to guess overnight margin could be 1.5k to 3k range



Sent using the futures.io mobile app

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k7ler View Post
I think the reason that there is more trader on bitcoin and crypt and the reason and simple any one can make profit and win money the second reason know that trader are human do not know robots or algo so more easy to trade and win money on a movement on trade to win money and not for loss money so on a bullish movement everyone wins, that all

@k7ler

You are correct 100% k7ler

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https://www.marketwatch.com/story/cme-ceo-says-futures-exchange-for-bitcoin-will-be-ready-2nd-week-of-december-2017-11-13

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with the recent events concerning BTC hard fork cancellation and BCH making insane gains, how does this play into the bitcoin futures?

BTC BCH are separate blockchain so it seems impossible to average a contract for both especially if BCH dominates BTC in mining power


fwiw I wouldnt bother with specific crypto contracts because the space is still too new, theres not even earnings for crying out loud

at the very most have an industry contract like miniSP and see how it plays out for 12mths before adding specific contracts for whatever survivors exist in the space

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BCH just did a hard fork that changes how the difficulty scales. A lot of the moves over the weekend had to do with miners switching back and forth as one coin became more profitable than the other. We'll have a better view of things when the dust settles. For all we know there will be a flippening before December. And of course this is still assuming the regulators approve it, which I don't think is a done deal.

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the flippening makes my brain do a flippening

guess its best to stay away and watch

but boy ohh boy it will be a very interesting dynamic come 2018 with an emerging industry locking step with an established giant like futures

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SpeculatorSeth
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Well I have a hard time just watching, but getting involved in this mess is just too risky. Especially with Bitcoin in particular where there's a real risk of your transactions not getting processed because there's too many transactions. I liked Bitcoin Cash when it went down after the segwit fork was canceled. If I had traded it I would have gotten in there, and taken half off when it doubled. I just have no clue how today is going to turn out though. So I'm just mining Ethereum instead

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mistafista View Post
with the recent events concerning BTC hard fork cancellation and BCH making insane gains, how does this play into the bitcoin futures?

BTC BCH are separate blockchain so it seems impossible to average a contract for both especially if BCH dominates BTC in mining power


fwiw I wouldnt bother with specific crypto contracts because the space is still too new, theres not even earnings for crying out loud

at the very most have an industry contract like miniSP and see how it plays out for 12mths before adding specific contracts for whatever survivors exist in the space

You are right, this is a new space, and it is yet to be determined who will survive.
I am not going to get too technical here to explain why BCH will not take over Bitcoin or replace it, but I will say that miners jump from one currency to another when it becomes expensive to mine one over another. Since the mining is dominated by a few major players, their decisions affected speculative moves. There are sites like https://www.fork.lol/ that measure this.

At this point, in my opinion, this will not affect CME's decision as far as launching Bitcoin Futures.

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i am still wondering if the futures market can lead the spot market
drawbacks on CME/CBOE, it cant trade on weekends, we know what bitcoin can do on weekends

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interestingstuff View Post
i am still wondering if the futures market can lead the spot market
drawbacks on CME/CBOE, it cant trade on weekends, we know what bitcoin can do on weekends

Yes, it can. Think of this, Just a rumor of the CME listings gave a boost to the pricing. If there is a heavy volume and demand on the Futures side, it will affect spot by mathematical correlation as well.

As for not trading on the weekend: I guess it is subjective as most appreciate some time that they can dedicate to learning and also relax the mind. also, since this is a new technology, and the news hit it from all directions now, I would recommend not hold any positions over the weekend. clearly, account size, the appetite for risk would dictate how one trades it.

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There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #57 (permalink)
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$25 per contact? sounds like you will need a dedicated 100k + account.

When is the Bmini launching?

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mattz View Post
Found this rather interesting

"If the Chicago Mercantile Exchange or any other clearing organization clears a cryptocurrency together with other products, then a large cryptocurrency price move that destabilizes members that clear cryptocurrencies will destabilize the clearing organization itself and its ability to satisfy its fundamental obligation to pay the winners and collect from the losers on the other products in the same clearing pool."

Interactive Brokers chairman warns about dangers of bitcoin futures - Business Insider

Matt Z
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Thanks Matt. I saw a similar story. I don't understand his logic. If margined correctly there should be little to no risk to other clearing members, or customers.

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  #59 (permalink)
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i think the cboe bitcoin contract looks most promising
i would assume they will structure their contract with no limits
also smaller notional size with easier arb between the gemini exchange

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  #60 (permalink)
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That obtuse talking head girl in the CNBC interview skirted around or did not understand Peterffy's point. Damn I hate the MSM.

He wants a ring fence around the Bitcoin futures clearing. I don't see why this would be a big problem.

Incidentally he has recently ruffled some feathers by raising the IB margin on vol products to the point where vol traders are going elsewhere.

Risk management.

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  #61 (permalink)
 
 
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Devil Man View Post
just your general thoughts about how they built it compared to say ES and 6E?

I took some time to give you an answer that I hope would be satisfactory without rambling on.
This is, of course, my opinion only based on my observation of cryptocurrency behavior in the last few years.

Typically, I do not interfere or recommend whether traders should trade long-term or short-term on any futures instrument. However, I feel rather strongly that Bitcoin Futures should be used only as a day trading tool specifically not held over the weekend. Let me explain further.

The Bitcoin cash market is a new market as an underlying asset and is susceptible to a lot of news whether substantiated or not. As such, during the times that the market is closed, you could be exposed to circumstances that would not be favorable to you. The cash markets operate 24/7. In particular, you should not be exposed over the weekend.

Second, the market is saturated with players who are either in a state of FOMO and/or ones that will try to short it hoping Bitcoin would collapse. Both players will bring volatility to the Futures market, and I suspect will feel very strongly about their positions and opinions. This may trigger margins calls, spikes, and other price action not favorable to traders who may develop long-term ideas and methods.

Consider also a fundamental view. We do not know today which cryptocurrency and blockchain will prevail in the long run. Further, who is to say that Bitcoin validity comes at 10K or $100? Who knows if Ether will prevail over Bitcoin as it is growing its ecosystem? The cryptocurrency space will evolve and grow and what we consider as a given today, may not be valid in a few years.

Approach this asset class as carefully as you would approach any contract: check liquidity, fluctuations, leverage, etc.

I hope this helps.

Matt Z
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  #62 (permalink)
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mattz View Post
I took some time to give you an answer that I hope would be satisfactory without rambling on.
This is, of course, my opinion only based on my observation of cryptocurrency behavior in the last few years.

Typically, I do not interfere or recommend whether traders should trade long-term or short-term on any futures instrument. However, I feel rather strongly that Bitcoin Futures should be used only as a day trading tool specifically not held over the weekend. Let me explain further.

The Bitcoin cash market is a new market as an underlying asset and is susceptible to a lot of news whether substantiated or not. As such, during the times that the market is closed, you could be exposed to circumstances that would not be favorable to you. The cash markets operate 24/7. In particular, you should not be exposed over the weekend.

Second, the market is saturated with players who are either in a state of FOMO and/or ones that will try to short it hoping Bitcoin would collapse. Both players will bring volatility to the Futures market, and I suspect will feel very strongly about their positions and opinions. This may trigger margins calls, spikes, and other price action not favorable to traders who may develop long-term ideas and methods.

Consider also a fundamental view. We do not know today which cryptocurrency and blockchain will prevail in the long run. Further, who is to say that Bitcoin validity comes at 10K or $100? Who knows if Ether will prevail over Bitcoin as it is growing its ecosystem? The cryptocurrency space will evolve and grow and what we consider as a given today, may not be valid in a few years.

Approach this asset class as carefully as you would approach any contract: check liquidity, fluctuations, leverage, etc.

I hope this helps.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

oh fantastic @mattz! this is just what I was looking for, thoughts from a seasoned industry professional such as yourself. I really appreciate you getting back to us on this!

спасиба

Happy Thanksgiving!

Johnny

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  #63 (permalink)
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Hi @mattz Hope you are doing well, I am asking you for your input because you are a broker that says it like it is, and I appreciate that. Alright onward and forward to the point- What's the scoop on the BTC futures? Is your brokerage going to offer it? What's the scuttle but in the community that I am sure you are privy to?
Share with us if you will? Thanks in advance for any input/info.

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learning0101 View Post
Hi @mattz Hope you are doing well, I am asking you for your input because you are a broker that says it like it is, and I appreciate that. Alright onward and forward to the point- What's the scoop on the BTC futures? Is your brokerage going to offer it? What's the scuttle but in the community that I am sure you are privy to?
Share with us if you will? Thanks in advance for any input/info.

Thanks! I appreciate the kind words. So here is the chatter: We should have something from the CME in the second week of Dec. Yes, we are going to offer it the minute it will come out. If you PM me your email, I will make sure that you get the information from us when it is launched.

This is ONLY my personal opinion: I think the delay has been as a result of Margin. In other words, the exchange needs to think long and hard what sort of margin should be implemented. On one hand, they cant be too high to discourage players, and at the same time, it can not be too small due to the wide fluctuations this underlying asset has.

I hope this helps!

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  #65 (permalink)
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https://www.cnbc.com/2017/12/01/cme-says-its-launching-bitcoin-futures-on-dec-18.html

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  #66 (permalink)
 
 
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CME sent an email as well while confirming this date, DEC 18th.

Thank you,
Matt Z
Optimus Futures

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Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #67 (permalink)
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Bitcoin has no intrinsic value I think that know a virtual currency is a financial bubble. Its price could fall to zero if the confidence in the system was to disappear know that a numerical value only that is feeds the dark web to bought illicit and illegal product that does generate so much money and profit a value adds , I think bitcoin and a scam I think at the beginning that was a revolution and that it's going to help a lot of people get out of misery and poverty, maintains I'm persuading that Bitcoin has no social role,

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  #68 (permalink)
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CBOE confirmed it will start trading futures on 10 Dec. What retail brokers are working with them? I'm with AMP now and they still got no idea about CME or CBOE btc futures. Crazy...

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  #69 (permalink)
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k7ler View Post
Bitcoin has no intrinsic value I think that know a virtual currency is a financial bubble. Its price could fall to zero if the confidence in the system was to disappear know that a numerical value only that is feeds the dark web to bought illicit and illegal product that does generate so much money and profit a value adds , I think bitcoin and a scam I think at the beginning that was a revolution and that it's going to help a lot of people get out of misery and poverty, maintains I'm persuading that Bitcoin has no social role,

Same B.S. I've heard from day 1 of Bitcoin and crypto's in general.

I've made a ton of $$ from $BTC and keeping my faith in not only the asset, but the tech as well.

To each their own and all that.

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  #70 (permalink)
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The CBOE contract seems more suitable for retail traders. It will be based on 1 BTC contract:

Contract Specifications

Looks like they are basing on Gemini only. This is interesting. I have seen other products that use multiple indexes are more difficult to tape read because you have situations where Asians are very bearish and US traders bullish or vice versa.. This might make it trade and behave better. But, also, possibly not as reflective of the world BTC price.

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  #71 (permalink)
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Do you understand their minimum tick size? It sounds Japanese to me:

Minimum Price Intervals:
10.00 points USD/XBT (equal to $10.00 per contract). The individual legs and net prices of spreads in XBT futures may be in increments of 0.01 points USD/XBT (equal to $0.01 per contract).

If price moving 1 USD how much you gonna make/lose?



tpredictor View Post
The CBOE contract seems more suitable for retail traders. It will be based on 1 BTC contract:

Contract Specifications

Looks like they are basing on Gemini only. This is interesting. I have seen other products that use multiple indexes are more difficult to tape read because you have situations where Asians are very bearish and US traders bullish or vice versa.. This might make it trade and behave better. But, also, possibly not as reflective of the world BTC price.


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  #72 (permalink)
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It sounds like, for a market entry and exit, you need a move a $20 to break even (lose $10 on entry and $10 on exit). This is comparable to the existing leveraged exchanges. If you capture the spread on exit, you would need a $10 move to break even. You can divide an average day's range or any move by $10 to figure up what it looks like in ticks.

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  #73 (permalink)
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On CME 1 tick=5 usd on bitcoin price and you make/lose 25$. So with CBOE if 1 tick is 10 usd on bitcoin price, you should make/lose 20-30 usd, otherwise its not leveraged. But its not clear now. I will write them an email today.



tpredictor View Post
It sounds like, for a market entry and exit, you need a move a $20 to break even (lose $10 on entry and $10 on exit). This is comparable to the existing leveraged exchanges. If you capture the spread on exit, you would need a $10 move to break even. You can divide an average day's range or any move by $10 to figure up what it looks like in ticks.


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  #74 (permalink)
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1 contract is equal to 1 Bitcoin. Leverage is determined by the combination of margin requirements and contract size. See my prior explanation to mattz. If I allow you to trade Bitcoin with $1 margin then that's ~12,000x leverage even though the granularity of the contract is 1:1. If you want more leverage, you'll just buy more contracts.

Large contracts are primarily a benefit to institutional traders because it reduces their trading costs which are based on per contract basis.

Basically, if you are trading less then 5 BTC contracts (or slightly more and want to split your orders up) then you will prefer the CBOE contract but if you want to trade 5 or more then the CME contract will likely be more cost effective. All things equal.


meow View Post
On CME 1 tick=5 usd on bitcoin price and you make/lose 25$. So with CBOE if 1 tick is 10 usd on bitcoin price, you should make/lose 20-30 usd, otherwise its not leveraged. But its not clear now. I will write them an email today.


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  #75 (permalink)
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I got reply to my email to CBOE:

There is no multiplier for the contract so, each contract is dollar for dollar. As of right now, the OCC has the initial margin set for 44% with maintenance set at 40%.



tpredictor View Post
1 contract is equal to 1 Bitcoin. Leverage is determined by the combination of margin requirements and contract size. See my prior explanation to mattz. If I allow you to trade Bitcoin with $1 margin then that's ~12,000x leverage even though the granularity of the contract is 1:1. If you want more leverage, you'll just buy more contracts.

Large contracts are primarily a benefit to institutional traders because it reduces their trading costs which are based on per contract basis.

Basically, if you are trading less then 5 BTC contracts (or slightly more and want to split your orders up) then you will prefer the CBOE contract but if you want to trade 5 or more then the CME contract will likely be more cost effective. All things equal.


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  #76 (permalink)
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Woha CME sets margin at 47% ...

currently overnight margin $38485 per 1 contract
Bitcoin Margins - CME Group


if they are not gonna reduce margin then they should reduce contract size to 1 bitcoin at least like CBOE..

any idea what would be indraday margin for this ??

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  #77 (permalink)
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CME Bitcoin contract is dead on arrival, IMO. $38,000 margin requirement is nuts.

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Neo1 View Post
Bitcoin is so fragmented, and presumably inefficient compared to a mature futures product. So hypothetically speaking, what is going to happen if someone like JPM start selling BTC futures with crazy large size. How will this effective the underlying price at each BTC exchange?

Those games are possible only in our rigged stock and futures markets. Not going to affect BTC.

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  #79 (permalink)
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vk79 View Post
Those games are possible only in our rigged stock and futures markets. Not going to affect BTC.

May I ask what makes you think that is not applicable to BTC? Is there a limit as to how many BTC Futures contract that a central bank can short ?

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vk79 View Post
Those games are possible only in our rigged stock and futures markets. Not going to affect BTC.

Actually it's more probable in BTC because of the tight control over BTC supply and how illiquid it is. The last I checked, it took only $5M to move the price 4%. At today's prices, maybe about $8M for 2%. By the same virtue, 1 person alone crashed the price of ETH to $0.10 in a single $30M trade. Someone Sold $30 Million Worth of Eth, Sending Price to $0.10 Temporarily

There's 1000 BTC wallets that have >$28M and can single-handedly crash the entire BTC market.

How many institutions do you think can move ES by 2% in a fat finger trade?

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  #81 (permalink)
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I'm going to stay above or below the fray on this issue crypto and all forms of trading it. The aficionados are zealots and the pros (including many friends) will be complicit in the ruin of weak. Neither the debate or the practice suit me.


artemiso View Post
Actually it's more probable in BTC because of the tight control over BTC supply and how illiquid it is. The last I checked, it took only $5M to move the price 4%. At today's prices, maybe about $8M for 2%. By the same virtue, 1 person alone crashed the price of ETH to $0.10 in a single $30M trade. Someone Sold $30 Million Worth of Eth, Sending Price to $0.10 Temporarily

There's 1000 BTC wallets that have >$28M and can single-handedly crash the entire BTC market.

How many institutions do you think can move ES by 2% in a fat finger trade?


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  #82 (permalink)
 
 
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ShatteredX View Post
CME Bitcoin contract is dead on arrival, IMO. $38,000 margin requirement is nuts.

In my opinion, what will determine the success of this is the cost of execution, technology, and safety. The margins are not irrelevant to institutions, but again I do not think it's what going to discourage them. As far as retail, yes, it is for much larger accounts.

Matt Z
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  #83 (permalink)
CONSTANTINE/ALGERIA (DZ)
 
 
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a wait when goldman sachs decided to bigshort the bitcoin make

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  #84 (permalink)
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On CQG feed BTC now have live data.
Spread is big, around 10-15 ticks.
1 tick=25$

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  #85 (permalink)
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Where do you guys trade the BTC future from the CME ?

AMP doesnít offer it
Tradovate has yet to enable it for live (it can be charted and sim traded only)
NinjaTrader Brokerage rquires a $40k intraday margin

What else ?

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  #86 (permalink)
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Advantage Futures allow it but I believe approval is on a case by case basis. Originally they were also charging margin in excess of the exchange requirements (not something they normally do) but not sure if this is still the case.

Note that the exchange margin requirements for Bitcoin is 37% of notional for non hedge activity and 110% of that for speculative. With last nights settlement of 11380 maintenance margin was $21,053 (11380*5*.37) and initial margin was $23,158 per contract. With Bitcoin up $1430 today margins will be increasing $2910 tonight if prices stay here.

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NapoleonDynamite View Post
Where do you guys trade the BTC future from the CME ?

AMP doesnít offer it
Tradovate has yet to enable it for live (it can be charted and sim traded only)
NinjaTrader Brokerage rquires a $40k intraday margin

What else ?

We offer BTC, on a case by case basis,. This is a tricky contract because the exchange is closed on the weekend, but the cash is still working 24/7. If you keep positions overnight, you should be able to cover a lot of the notional value.
If you day trade, they may have less restrictive rules.

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  #88 (permalink)
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Whatís the difference between non hedge and speculative then ? Donít get it

mattz you offer it through CQG connectivity ? Iíd daytrade only, canít risk overweekend and would avoid the daily 1 hour maintainance closure too, since a 10% move could certainly happen during such time window

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  #89 (permalink)
 
 
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NapoleonDynamite View Post
What’s the difference between non hedge and speculative then ? Don’t get it

mattz you offer it through CQG connectivity ? I’d daytrade only, can’t risk overweekend and would avoid the daily 1 hour maintainance closure too, since a 10% move could certainly happen during such time window

Hedging in Futures is when you actually have the underlying asset. In the case of BTC, you would have the digital asset, and you would use the Futures contract for the price protection. Traders who have the physical commodity do in Ags, metals, energies, etc.

I can tell you that your account size would determine your margins on BTC for day trading as well as the number of contracts you wish to hold and your net-worth. Risk managers are apprehensive about this contract.
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Matt Z
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  #90 (permalink)
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I’d do fine with the 37% of exchange margin for intraday, without excess.
Else, I might as well go with LMAX, offering 2:1 leverage and especially opened during the weekend, 24/7 except 5 minutes per day, without further checks

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  #91 (permalink)
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https://www.bloomberg.com/news/articles/2019-06-29/weekends-are-the-wild-west-for-bitcoin-but-nobody-knows-why

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  #92 (permalink)
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Worth adding here that CME options will be an interesting addition to the 'institutional' access for XBT. Coming Q1 2020.

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  #93 (permalink)
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Needs to be said that the introduction of options was what killed Tulipmania.


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suko View Post
Needs to be said that the introduction of options was what killed Tulipmania.

What killed the price was the lack of buyers showing up in auctions.

Maybe Options took the form of promissory notes back in the 1600s, but definitely not the form it takes today as a mathematical priced financial tool.

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I am using that point to troll the topic some. Of course there is little relation to the
options strategies we can do today.

Taleb:
"Bitcoin: my answer to the repeated questions.
No, there is NO way to properly short the bitcoin "bubble".
Any strategy that doesn't entail options is nonergodic (subjected to blowup)."


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Are CME BTC futures the best way for US traders to trade/hold BTC with leverage?

Which brokers support it and at what margin?

Amp does not, CME exchange requirement is 28k Maintenance. TD wants 45k, IB is 50k or so. Any other options that work with lower spread/roll costs?

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I believe official margin rates for outrights is 37% of notional, so with Bitcoin at $17,000 margin on the 5 coin CME future is 17000*5*.37 = $31,450. This represents leverage of just 2.7:1 versus approximately 8.5:1 in CL and 15:1 in ES. Additionally as you state many brokers have margin premiums in excess of that. I clear my Bitcoin with ED&F who margin at the exchange margin rate. Others you might try are Phillips, FC Stone, Wedbush.

ICE also have a contract that is smaller at 1 coin per contract. Margin rate is the same at 37% but obviously since the contract is 20% of the size, the margin requirement is also 20% the amount. ($6,290 per contract) Finding brokers to clear this is even more difficult but the 4 mentioned above all do.

As a US resident many of the major exchanges are not legally open to you. I believe Coinbase is the largest US based exchange. They require 100% margin on all positions, do not allow short selling, and unless you qualify for a pro account I believe their fees make futures trading look very cheap. There are other options out there and which is best for you may be a function of what you want to do. When evaluating brokers I would make sure you consider
  • Fees to deposit money (yes these can be quiet high)
  • Fees to trade
  • Fees to withdraw Bitcoins from your account to your own Wallet (these can be high as well)
I would also consider your credit risk. The 5 coin size of the CME is very large, but I personally am happier with the CME credit risk than I would be with many (all?) other exchanges. Additionally since the CME contract is financially settled they don't have any actual coins in storage that can be hacked/stolen etc. ICE's contract is a physically delivered contract but they have a custodian solution 'Bakkt' (which is free) with partners Microsoft & StarBucks. I believe they (Bakkt) also have $100 Million of insurance.

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