Peterffy (IB) takes out ad in WSJ to warn against BTC futures
- Thread starter JackRab
- Start date
Petterfey actually is kinder towards this nonsense than you'd think, certainly kinder than me
https://www.cnbc.com/video/2017/11/...-speed-trading-just-put-bitcoin-on-blast.html
https://www.cnbc.com/video/2017/11/...-speed-trading-just-put-bitcoin-on-blast.html
The letter from Thomas Peterffy of Interactive Brokers to the CFTC is the top link here https://www.interactivebrokers.com/en/index.php?f=562 and attached below.
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Then how did the fool get their money in the first place? Could never figure that out.
The solution for such volatile instruments , is to auto-deleverage both sides the winning and the losing , thats how they do it at Bitmex and they offer 100:1 leverage for this sh** ! . They show you your position que in the auto-deleveraging algo . If losers dont have enough money to cover losses then you auto-delevrage them and the winners , if there are no winners then there are no losers .
At what price do they auto-deleverage? Because if the price jumps 100% there's no time to auto-deleverage. You can't just say, you can't take your profit because the losers can't cover it. That's called defaulting.
Unless they control the price themselves at Bitmex... which is a form of centralization so flies against the believes of bitcoin community....
"Margin
We expected a market with this much volatility would require a bit more margin than your typical futures contract… perhaps on the range of the VIX futures margin requirements. And, yes, it is large, with the CME setting margin between 25-30%. Margin can be roughly thought of as the amount that the exchange wants customers to have in their accounts to cover a 1 day loss, so 30% is telling you they don’t see this normalizing in terms of volatility any time soon.
As of November 1, the indicative Initial Margin for BTC futures is 25-30%. This is subject to change, and is being reviewed on an ongoing basis.
What does 30% margin equate to in terms of money needed in your account to trade these futures. Well, with Bitcoin at around $6,500 and the contract worth 5 bitcoin, the nominal size of the contract (as of today) would be $32,500 worth of Bitcoin. 30% of that is $9,750. So, you’re looking at needing about $10,000 to “own” exposure to 5 bitcoins, which seems far better than shelling out tens of thousands to some unregulated offshore Bitcoin exchange (which is exactly what the futures exchanges are betting on..)"
The first email I've received that they be offering the futures.
We expected a market with this much volatility would require a bit more margin than your typical futures contract… perhaps on the range of the VIX futures margin requirements. And, yes, it is large, with the CME setting margin between 25-30%. Margin can be roughly thought of as the amount that the exchange wants customers to have in their accounts to cover a 1 day loss, so 30% is telling you they don’t see this normalizing in terms of volatility any time soon.
As of November 1, the indicative Initial Margin for BTC futures is 25-30%. This is subject to change, and is being reviewed on an ongoing basis.
What does 30% margin equate to in terms of money needed in your account to trade these futures. Well, with Bitcoin at around $6,500 and the contract worth 5 bitcoin, the nominal size of the contract (as of today) would be $32,500 worth of Bitcoin. 30% of that is $9,750. So, you’re looking at needing about $10,000 to “own” exposure to 5 bitcoins, which seems far better than shelling out tens of thousands to some unregulated offshore Bitcoin exchange (which is exactly what the futures exchanges are betting on..)"
The first email I've received that they be offering the futures.
Luck or Inheritance.
Actually Inheritance also falls under Luck!
It was G Gekko who once said "A fool and his money are lucky enough to get together in the first place".