CME Group Announces Launch of Bitcoin Futures

bone said:
If you had read my post more carefully before replying, you’d realize that I addressed the weather and insurance futures problems as wholly liquidity related in a separate paragraph citing manifold problems with previous futures contracts rollouts.
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I agree that the exchanges to a horrible job of rolling out new products with almost an entirely "build it and they will come" mentality. I would think the universe of people interested in weather derivatives vs the universe of people interested in bitcoin are night and day, but again Nadex didn't get much interest so maybe not. I'm also not sure that there are many brokers for retail traders to access the weather or insurance futures easily, am I wrong on that?
 
Sig said:
I agree that the exchanges to a horrible job of rolling out new products with almost an entirely "build it and they will come" mentality. I would think the universe of people interested in weather derivatives vs the universe of people interested in bitcoin are night and day, but again Nadex didn't get much interest so maybe not. I'm also not sure that there are many brokers for retail traders to access the weather or insurance futures easily, am I wrong on that?
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You can trade weather on CME and ICE. And Winton is about to launch a series of products entirely devoted to weather.
 
Bone, I think BTC will follow the path that VIX had at the beginning. Technically there was no fungibilty there either from a practical sense. At the beginning no one understood it and cries of manipulation occurred regularly. I suspect there will be a premium in the forward curve for BTC futures with spot price converging with the futures relatively speaking going into expiration.
 
Sig said:
I'm also not sure that there are many brokers for retail traders to access the weather or insurance futures easily, am I wrong on that?
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Looking at BitCoin Volatility I'm not convinced that the futures margin requirements would be able to attract such a wide swath of retail traders. I'll put it another way - the contract spec (which is not finalized) would have to utilize a really really modest notional value in order to be affordable for retailers. You're talking vols at present that surpass many typical electricity markets which is mind numbing. I'm also of the mind that the Risk Managers at retail futures brokers are going to be really anxious about firm exposure.
 
bone said:
Looking at BitCoin Volatility I'm not convinced that the futures margin requirements would be able to attract such a wide swath of retail traders. I'll put it another way - the contract spec (which is not finalized) would have to utilize a really really modest notional value in order to be affordable for retailers. You're talking vols at present that surpass many typical electricity markets which is mind numbing. I'm also of the mind that the Risk Managers at retail futures brokers are going to be really anxious about firm exposure.
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They will probably have a full size and a mini version for the home gamers. That will bring in some arb players which usually helps some with liquidity.
 
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