Micro-ETH Futures -- Big Swinging Dick

The_Krakenite

The_Krakenite

They are finally here, the CME GROUP's micro-Ethereum Futures. :sneaky:

MET

https://www.cmegroup.com/markets/cryptocurrencies/ether/micro-ether.html

Yet for some reason, no noob is excited about this, despite last year every crypto noob was complaining that this instrument was badly needed for retailers. I guess there are no amateurs anymore, everyone is a pro now within six months.

That said, I'm looking for something new to blow my bankroll on, so now is my chance to dive into this before I do something really stupid (like buy bonds).

There is one problem, I haven't traded futures (ever). But, I've read a few books about futures, so that makes me almost pro already! I just have to figure out what I am doing first.

And besides, once I get my first futures-trade under my belt, I'll be able to brag to a TikToker like some Big Swinging Dick who graduated from Salomon Brothers. So I can't let this opportunity to pad my resume to Berkshire Hathaway pass me by.

That said, time to do some due diligence on this cash-settled contract first:


Alright, now that I've spent my 3-4 minutes of superior in-depth analysis by watching that, it's time to take a break for the day...


  • Big Swinging Dick — A big-time trader or salesman. ("If he could make millions of dollars come out of those phones, he became that most revered of all species: a Big Swinging Dick.") The opposite of this term is Geek, used to refer to a just-hired trainee.
 
despite all the publicity, the micro BTC futures volume has been rather pathetic.
The same goes for MET futures.

If you want to swing trade these futures, that's fine.
If you want to day trade these futures, that might be a problem;
the bid-offer spread is horrific. it is easily > 10 ticks.
 
maxinger said:
despite all the publicity, the micro BTC futures volume has been rather pathetic.
The same goes for MET futures.

If you want to swing trade these futures, that's fine.
If you want to day trade these futures, that might be a problem;
the bid-offer spread is horrific. it is easily > 10 ticks.
More...
only 10 ticks? Look at the bid/offer of spot markets...it's not better either. Should be a free for all for traders who provide liquidity
 
Liquidity on micro ether is still not great. $0.30 million of annualised risk a day (~800 contracts). Full fat Ether is $30m (~300 contracts, but they are big!), micro bitcoin is $1.3 million (Also ~800 contracts a day). Micro BTC is just about at the level where I'm happy to trade it.

Costs for micro ether come in at 0.03SR units (spread around 35 points). Way too expensive: needs to drop to ~10 points to be tradeable. Full fat is just 0.003SR (spread around 3 points). Micro bitcoin is also pretty cheap 0.005SR (with a 25 point spread). That's about the same as the Russell 1000, for context.

So it's true to say that micro ether isn't tradeable yet, but micro bitcoin is okay I'd say.

GAT
 
So, today we resume with a new type of trade that I will probably regret. But regardless, there is nothing that will stop me now!

Then, I suddenly find myself stopped after running into a brick wall. :banghead:

It turns out that since my account is not US Domiciled, I can not carry out a contract trade without doing some sort of ForEx trade first. Or something like that. But I have no permissions for ForEx.

...

Alright, now that I fixed permissions in Interactive Brokers, nothing will stop me now!

Then, I suddenly find myself stopped after running into a brick wall again. :banghead:


fx.png




It seems that I have to make a binary-choice with IBKR on whether I wish to do a currency conversion, or FX trade.

Funny that, I've traded US stocks, and US options, and I've NEVER had this sort of issue before.

I do my due-diligence and watch some IBKR videos on trading ForEx, and I just come out even more confused.

Time to leave this decision to strangers on the internet like a real pro:
  1. Currency Conversion
  2. Virtual FX Position
  3. "What is Futures means??"
  4. All of the above

We'll return back after a quick commercial break by our sponsor 'Short-Term Capital Management' while the audience plugs in their choices.
 
Monday morning; I've been up all night studying financial statements, just like that Chicken Buffet guy. He had two rules. One was don't lose money, and the other rule I'm not sure about because I forgot.

Anyway, it's still dark outside but it doesn't matter because we can trade Futures before 9:30 am, unlike equities. So I go LONG my first ever futures contract and feel'in like a big-swinging-dick. Even though I'm still just wearing my SHORTs (get it?)

And of course, not even ONE second after I do that, ETH drops 20-bucks on me. lol Fastest 20-bucks I ever lost.

cme.png



I only went with one contract for now. I have debated on buying up more for later this year, even though the later-dated contracts are naturally higher in price. Looks like smart money isn't expecting any more crash/corrections.

Before I act too bold on buying up more, I may just do some mathwork later this morning when the Montreal derivatives exchange opens. I am seriously thinking on creating synthetic LONG-stock positions with ETH expiring late this year (or into next year). But I have a feeling the spreads will be too wide.

Note, I did a quick double, and triple check on our margin first in regard to the MET trade, just to make sure I wasn't accidentally misclicking and buying the REGULAR Ether contract, which controls 50 ETH!

After all, I don't want to end up like Kevin Bacon in Quicksiver and watch him ride his margins to kaput. Remember,

He wasn't just good.
He was the best.
"I'm gonna sell every option I can get-" Kevin Bacon
 
So! It's expiration Friday (at least for some of my options). Here is the strange part, I did my trades YESTERDAY, thinking that YESTERDAY was Friday, not today... Oooops. But luckily no harm done (yet). I was wondering why everyone was going to work on a Saturday morning!


4 of my old shorted CALLs on Sonos @ Strike of 35 are about to expire worthless (yay).

I continue by shorting four more CALLs but @ strike of 30. After all, it's a bear-market.

What makes things interesting, is since I got my days mixed up, I was actually shorting calls naked. Haw! Well there's a first for everything. Now I can say I lived dangerously.

I collected $60 for each contract which was set for DTE of 15. Premium was great considering they were at a whole standard deviation out. Reason being, earnings is coming up soon. I'm ok if the stock gets called away too. Happy to take the $240 for now and feel that I re-paid part of my earlier 30K loss for the year's start.

Speaking of, my Interactive Brokers mastercard arrived. Now I can go and waste more of my account on stupid stuff. (Yay)

debit-card-shadow-2020.png


I know what you're thinking. But the answer is NO, that's not my real # and name. Sorry.
 
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