Hey everyone, probably a very basic question here but will Crypto futures, bitcoin, ethereum, etc move the same magnitude as the actual coin. I am not a fan but my business partner is and wants to buy. So If he buys a bitcoin futures contract priced at $40k on interactive brokers, will he make the same return as if he bought an actual bitcoin on Coinbase?
Bitcoin same as futures?
- Thread starter spinn
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Contracts have expiration dates whereas the coin itself is forever. This means, at the date the contract expires (3 months?) he will own the bitcoins at the contract price he first bought it. If he buys the actual coin it is whatever the price is from here to eternity on the day he converts it.
I believe one BTC future is 5 bitcoin or something. I forgot.
Monthly contract, cash settled.
Yeah they have them on Tradestation, but I've never even bothered to look. I know their contract prices are ridiculous. Something like $5 one way, $10 round trip.
The only future's I've bothered with are the micro-Ethereum Futures (CME Group).
That contract size is 1/10th of what an ETH coin is. So therefore, it should be a retailer favorite. But it's very new so just getting some traction.
Now, when CME Group adds Options trading on those futures, (in the future- no pun intended) I'll be happy to give them a go.
That contract size is 1/10th of what an ETH coin is. So therefore, it should be a retailer favorite. But it's very new so just getting some traction.
Now, when CME Group adds Options trading on those futures, (in the future- no pun intended) I'll be happy to give them a go.
1 Bitcoin Futures = 5 Bitcoin
1 Micro Bitcoin Futures = 1/10 Bitcoin
https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bitcoin.contractSpecs.html
https://www.cmegroup.com/trading/micro-bitcoin-futures.html
No. Futures contracts involve leverage. Read the contract specs here
https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bitcoin.contractSpecs.html
You do realize futures contracts can result in the loss of MORE than your initial investment right? In other words, if there is a sharp move against your position you will have to cover it from some other source. If your business partner wants to play the market with his/her own money fine; if this is a business "investment" then you will be at risk as well.
A big problem I see is if you suggest futures rather than keeping your mouth shut WHEN (not if) he/she loses a shitload of money doing something he/she has no business getting involved in it will be your fault.
Futures are leveraged. Bad idea particularly since it sounds as if this partner thinks bitcoin is an "investment" rather than a day timeframe speculative play.
https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bitcoin.contractSpecs.html
You do realize futures contracts can result in the loss of MORE than your initial investment right? In other words, if there is a sharp move against your position you will have to cover it from some other source. If your business partner wants to play the market with his/her own money fine; if this is a business "investment" then you will be at risk as well.
A big problem I see is if you suggest futures rather than keeping your mouth shut WHEN (not if) he/she loses a shitload of money doing something he/she has no business getting involved in it will be your fault.
Futures are leveraged. Bad idea particularly since it sounds as if this partner thinks bitcoin is an "investment" rather than a day timeframe speculative play.
The basic answer to your question is yes, the futures move in sync with the underlying, which in this case is the spot price, or "BRR", the Bitcoin Reference Rate on the CME.