CME Group Announces Launch of Bitcoin Futures

[Maverick74]

Somewhat of a basic question. Is there a robust vehicle for shorting BTC so the exchange products have something to hedge against? Is shorting cumbersome and can the short be carried in a clearing account at OCC or CME clearing?

There is no way to short the digital coin itself. That's in a way part of the structure of the product. Being able to short anything is really about lending and debt and as of now, I don't think there is a way to lend your BTC to someone else. And you can't sell something you don't own if you can't borrow it. There are some weird BTC derivatives out there that one can trade but who knows how closely they follow BTC. For example, BITMEX.

https://www.bitmex.com/app/trade/XBTUSD

 

[ajacobson]

@Maverick74 - Thanks. It's going to cumbersome to trade any derivative - as you know. Has the CFTC approved either listing yet?

 

[Illini Trader]

Somewhat of a basic question. Is there a robust vehicle for shorting BTC so the exchange products have something to hedge against? Is shorting cumbersome and can the short be carried in a clearing account at OCC or CME clearing?

Color me confused but I have no idea what you just asked?

 

[maxinger]

Great !!! I am ready to trade Bitcoin futures.

Opportunity to earn tons of money from Bitcoin futures
should be very high since the Bitcoin price volality has been super high.

 

[just21]

Bitcoin futures start the second week of December. Source Duffy on cnbc.

 

[Maverick74]

Bitcoin futures start the second week of December. Source Duffy on cnbc.

Yes and expected overnight margin at 20%.

 

[Cuddles]

There is no way to short the digital coin itself. That's in a way part of the structure of the product. Being able to short anything is really about lending and debt and as of now, I don't think there is a way to lend your BTC to someone else. And you can't sell something you don't own if you can't borrow it. There are some weird BTC derivatives out there that one can trade but who knows how closely they follow BTC. For example, BITMEX.

https://www.bitmex.com/app/trade/XBTUSD

There is, at least in bitfinex...

 

[Jankovic]

In perspective and based on price volatility it seems that the tick value is too big
I don't understand much the CME decision

 

[Overnight]

In perspective and based on price volatility it seems that the tick value is too big
I don't understand much the CME decision

Actually, the tick size seems right since it is $5 per tick x 5 BTC per contract, and each tick is a $5 move in the underlying. (So $25 per contract per each $5 move in BTC)

So if BTC moves $1000, it's 200 ticks. On one contract that's $5K change in contract value. Reasonable considering how BTC has been fluctuating. There will definitely be some wild days over there at the CME, but woe to those who position themselves too large for their risk. Like the VX at $50 per tick. I can't see VX data so do not know how crazy it moves, but on weeks like this I imagine it has moved a good bit.

 

[Jankovic]

Actually, the tick size seems right since it is $5 per tick x 5 BTC per contract, and each tick is a $5 move in the underlying. (So $25 per contract per each $5 move in BTC)

So if BTC moves $1000, it's 200 ticks. On one contract that's $5K change in contract value. Reasonable considering how BTC has been fluctuating. There will definitely be some wild days over there at the CME, but woe to those who position themselves too large for their risk. Like the VX at $50 per tick. I can't see VX data so do not know how crazy it moves, but on weeks like this I imagine it has moved a good bit.

What if the price value skyrocketing above 20k in a couple of months, with this kind of volatility?
With the current value it's quite normal to see a move of 30$ in 1 second. This means 6 ticks (150$) with one contract!
If the value of the contract goes to 20k or above, you can imagine how this could be shocking...
500 $ in just one second....
How many traders could be able to trade this instrument?
Why not to set a tick price value of 5$ instead of 25$?
As I said I don't understand the CME choice