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Here’s how you can trade Bitcoin Futures

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The Chicago Board Options Exchange, CBOE will launch Bitcoin futures on December 10, 2017 at 6pm E.T , it will be a landmark in bitcoin history and first opportunity for institutional investors to jump into the Bitcoin market.

Interest level of investors in bitcoin is really high, every one wants to know how they can trade bitcoin futures at CBOE, here’s how you can trade bitcoin futures

The Cboe will start by listing three near-term serial months. They will likely be January, February and March. They will expire on two business days prior to the third Friday of the month.

What will the initial prices be and what is the size of a contract? Each contract is one bitcoin. Market makers will set an initial price for each month and trading will begin. The front-month (January) price will likely be close to the underlying cash price. The minimum price interval is $10.00 per contract. The contracts are traded and settled in cash (you get dollars, not bitcoin, at the settlement).

How is the price determined? There are many different bitcoin exchanges, but Cboe uses Gemini Trust Co., an exchange and custodian founded in 2014 that allows customers to buy, sell and store digital assets such as bitcoin. There is a lively debate about how to “accurately” reflect the bitcoin price. CME, for example, is using the Bitcoin Reference Rate which is an aggregate of prices on four different exchanges. Bitcoin futures at CME are set to begin trading Dec. 18.

What are the fees for trading? Cboe will be waiving all of its transaction fees for the month of December. After that, the basic retail rate is $1.00 per contract.

What is the margin rate? Right now, the Cboe and CME will have margin rates of 40 and 35 percent respectively. (Note: Cboe has recently raised the rate from 30 to 40 percent) For example, if bitcoin is trading at $15,000, you can purchase a contract on margin for $4,500 (30 percent of $15,000).

When can I trade? Almost 24 hours a day during the week. Regular hours are 9:30 a.m. to 4:15 p.m. ET Monday through Friday, but extended trading hours go from 6 p.m. ET Sunday to 9:30 a.m. ET Monday, then 4:30 p.m. to 9:30 a.m. ET Tuesday through Friday.

How can I trade bitcoin futures on Cboe? You should contact your brokerage firm. Not surprisingly, retail brokers do not have a uniform stance on whether they will allow their clients to trade bitcoin futures. Fidelity is not currently planning to allow its members to trade futures contracts. Interactive Brokers will allow trading, but with a much-higher 50 percent margin requirement. Charles Schwab says it is evaluating its client interest in bitcoin, including their familiarity with the risk. And a TD Ameritrade spokesperson told CNBC they will only allow trading once volumes, open interest, and the market place meet their threshold

A number of large firms that typically cater to institutional brokers have already said they will not initially offer their clients access to the bitcoin futures market, including JPMorgan, Bank of America Merrill Lynch and Citigroup. Goldman Sachs, the largest U.S. futures broker, will offer access but only for certain customers.

If my broker doesn’t allow me to trade bitcoin futures, are there any other options? You could open a separate futures account with a futures broker, such as R.J. O’Brien.

Are there any price limits or trading halts? There are no price limits, but trading can be halted for two minutes under certain circumstances, for example when prices rise or fall 10 percent from the previous day’s price, and five minutes if it rises or falls 20 percent. The cash market for bitcoin would not be halted.

Will futures reduce or increase the volatility of bitcoin? No one knows. A lot will depend on how liquid the contracts themselves are, which depends on the number of participants and how many firms allow access to trading.

Can you short the futures contract? Yes. For example, suppose the bid is $15,000, you can go in and sell it immediately (you will have to post the margin requirement of 30 percent). You are now short one bitcoin contract at $15,000. If that goes to $16,000, you will have a potential loss of $1,000, and you may be forced to put up more margin. If it goes to $14,000, you have a potential profit of $1,000. You can close out the position at any time, or if you wait until the expiration it will settle automatically to cash.

Who are the market makers? There has not been a formal announcement of who the market makers will be, but some of the known large players — such as DRW and Virtu Financial — will be participating.

Who are the sellers? This is one of the big questions. You will likely see bitcoin miners as well as hedgers, or people who own bitcoin but sell futures against that to capture the spread. You may also see institutional traders come in because it’s a cash traded and settled account, you don’t need bitcoin.

This is a great step towards adoption of bitcoin United states and institutional investors would be able to participate in the market.

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Bitcoin under $4000

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Bitcoin is crashing again in crypto market along with other cryptocurrencies, as Bitcoin again dipped under $4000 mark.

2018 will be remembered as one of the worst years for crypto currencies, after spectacular boom of crypto market in 2017 in terms of adoption and increase in market cap, this year so far has proven to be the opposite of that, Crypto market cap reached the level of $800 billion at the start of 2018 and now the total worth of crypto market is $125 billion which shows more than 80% of decline in overall market cap.

Bitcoin dipped below the level of $3500 few days ago and now market is crashing one more time, shows that bottom is still not here and we are far away from bottom as of now, market dynamics are changing, shows that all the speculators in the market are taking a big hit from this bear market.

It will be interesting to see, how bitcoin will survive this crucial time period, but the biggest question is, where is the bottom? because according to many analysts in crypto market, bottom lies somewhere between $2000-$3000

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India’s largest Mobile & Internet industry forms Blockchain Committee

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India is promoting the blockchain ecosystem in the country and the latest move in this regard is the country’s influential internet and mobile industry association has formed a committee dedicated to the decentralized (blockchain) technology.

India’s most-read business daily the Economic Times reported, with the new blockchain committee, the Internet and Mobile Association of India (IAMAI) is batting an eye on the government to widen the blockchain industry and startups.   India’s most-read business daily the Economic Times report.

The focus is to use blockchain technology to facilitate job creation and reduce the unemployment rate in the country.  This will give a boom to the new digital economy in the country, the report added.

The new committee within the influential non-profit will be chaired by Tina Singh, digital chief at private lending giant Mahindra Finance.

She told the publication:

“Blockchain is undeniably the technology of the future, slated to bring decentralization and trust and accountability into multiple areas of business. However, in order to be more effective and enter the mainstream, blockchain technology needs the intervention of government bodies, regulatory authorities, and corporates.”

The committee includes several includes many well-reputed executives of major corporate giants spanning tech and financial sectors such as Microsoft, Mastercard, IBM and HDFC Bank, India’s biggest private bank.

Interestingly, the committee also includes Sandeep Goenka, founder of major Indian bitcoin exchange Zebpay. The app-only exchange was among India’s earliest and largest exchanges until it closed trading services less than a month ago. However, Zebpay continues to provide a wallet service to users, the exchange said it was “unable to find a reasonable way to conduct the cryptocurrency exchange business” following the central bank’s comprehensive ban that bars banks from providing services to exchanges and the wider crypto sector.

Despite the ban and less viability on the cryptocurrency sector, which remains unregulated, the formation of the blockchain committee proves the consistent effort to integrate the groundbreaking tech into wider society.

Singh added:

The IAMAI Blockchain Committee will focus on creating dialogue between all stakeholders; curate and create content to aid skill development and move towards creating a participative economy with the usage of blockchain.”

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BTCC Chinese Crypto firm plans to start its services in South Korea

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BTCC, China’s first cryptocurrency exchange, has planned to expand its services in South Korea on October 31, 2018.

Initially known as BTC China, the cryptocurrency trading exchange was one of the largest in the world in terms of trading volume. However, owing to  China’s crackdown on crypto trading and initial coin offerings (ICOs), the exchange was asked to shut down its services in the country in September last year and transferred to Hong Kong in January 2018.

According to a report, BTCC’s Korea operations will be headed by Lee Jae-beom. He said that BTCC Koplannedaned to highlight a new vision of cryptocurrencies. The exchange will first launch its beta services this month, with the official debut set for November.

Furthermore, the exchange stated that it will provide not only the trading, buying and selling services to its customers, but it also plans to create own a wallet, a mining pool, and a consumer payments service. However, there is still no information about the coins listed on an exchange. On the South Korean version of its website, the company has not yet specified which coins will be supported on the exchange.

Commenting on the launch, Lee said: “Cryptocurrency exchanges are facing a turning point due to a downturn in local exchanges while global exchanges are making a leap here. BTCC Korea will be able to present a new strategy and vision of crypto exchanges.”

The report said, BTCC also plans to expand its services and it wants to achieve this via strategic tie-ups with local and global firms. Recently, the company announced that it had joined hands with Defytime, a producer of anti-ageing products. The partnership will helpDefytime to adopt blockchain in healthcare products.

In Hong Kong, BTCC offers a range of services and products for trading to a global customer base. In particular, the exchange facilitates the trading of five cryptocurrencies against the USD – BTC, BCH, ETH, LTC, and DASH. In addition, BCH, ETH, LTC and DASH can also be traded against BTC.

 

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