CME Publishes bitcoin futures contract details and specifications. Contract size to be 5 bitcoins. Max position 1000 contracts spot month or 5000 bitcoin.
Breaking News: Contract size will be 5 bitcoins. Price fluctuations of 20% will halt trading for the day. Position limits will prevent dominance by any person. Max 1000 contracts in near month and 5000 contracts in total.
The advantages are as follows:
Regulated
No counter-party risk
Instant execution
Huge market depth -more than any exchange
Dealing available through existing channels like banks and brokers.
The disadvantage is that it is cash settled. They pay your profit in fiat. You never get bitcoin delivered to you.
The following is extracted from the CME Group website at http://www.cmegroup.com/trading/bitcoin-futures.html
Contract Specifications
Contract Unit.
5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR)
Minimum Price Fluctuation
Outright: $5.00 per bitcoin = $25.00 per contract
Calendar Spread and Basis Trade at Index Close (BTIC): $1.00 per bitcoin = $5.00 per contract
Trading Hours
CME Globex and CME ClearPort: 5:00 p.m. – 4:00 p.m. CT Sunday – Friday
BTIC: 5:00 p.m. - 10:00 a.m. or 11:00 a.m. CT (4:00 p.m. London Time) Sunday - Friday
Product Code
Outright: BTC
BTIC: BTB
Listing Cycle
Nearest 2 months in the March Quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest 2 "serial" months not in the March
Quarterly cycle.
Contract months for initial listing: Dec 2017, Jan 2018, Feb 2018, Mar 2018.
Termination of Trading
Last Day of Trading is the last Friday of contract month.
Trading in expiring futures terminates at 4:00 p.m. London time on Last Day of Trading.
Position Limits
Spot Position Limits are set at 1,000 contracts.
A position accountability level of 5,000 contracts will be applied to positions in single months outside the spot month and in all months combined. The reportable level will be 25 contracts.
Block Minimum
5 contracts
Price Limits
Price limits for a given Business Day are made by reference to the most recent Bitcoin Futures settlement price, settled at 4:00 p.m. London time each Business Day.
Special price fluctuation limits equal to 7% above and below prior settlement price and 13% above and below prior settlement price and a price limit of 20% above or below the previous settlement price. Trading will not be permitted outside the 20% above and below prior settlement price.
Settlement
Cash settled by reference to Final Settlement Price, equal to the CME CF Bitcoin Reference Rate (BRR) on Last Day of Trading.
This can only be understood by a professional who works on the stock market. The bottom line is that we have a limited number of contracts, a maximum of 5000 BTC, to get certain percentages at market value on the working days of the stock exchange.
What is the advantage of investing 5 BTCs here instead of somewhere else? What is the job security and cost-effectiveness in your opinion? I'd like you to help me a little if you have time @swissclive
Everything that has a price from the weather forecast in florida to dead pigs can traded on the CME. The advantages are as follows:
Regulated
No counter-party risk
Instant execution
Huge market depth -more than any exchange
Dealing available through existing channels like banks and brokers.
The disadvantage is that it is cash settled. They pay your profit in fiat. You never get bitcoin delivered to you.
The obvious strategy for an investor would thus be to buy the future and gradually unwind it as he goes through the tedious process of trading on Bitstamp or Kraken to get bitcoin gradually.
I'm wondering how you make money?
Can you tell me about your strategy? @swissclive
Personally I don’t like trading futures, but millions do.
You could make money by buying the March future at $7’000 (exposure =$35’000). If the next minute the price is $7’010, you can sell and make $50. Or you could wait till March. If the settlement price is $8000, then you are paid $5000 (5X the $1000 profit per bitcoin).
If you don’t have at least enough money in your account, to cover the exposure, you risk a margin call if it goes the wrong way and maybe a forced sale at a loss.
Thanks for the advice. I am a private owner and I made certain profits in the BTC.
I dont recommend futures except to those with very deep pockets, and expert knowledge of futures trading and rules.
You're really a great professional and you're very honest. Thank you for the time - I am your fan from now on to the end of my life. @swissclive tip! 0.1
Hi @swissclive! @dobartim is sending you 0.1 SBD tip and @tipU upvote
@tipU - send tips by writing tip! in the comment, get share of the service profit :)Well the cheetah is here.
I think you forgot to mention the source.
Anyways thanks for the information @swissclive
Original source was mentioned by me, but CHEETAH found a non-original source.
It does happen with almost every user.
it helps to put things into your own words as opposed to copy pasting though. . .Cheetah will nail you. . just my opinion
Yeah, I see that. As it was breaking news, I had to get it out. I added a few lines at the beginning of the key points, but cheetah bot got there first.
This is huge and justification by the regulatory bodies that BTC is here to stay. The CFTC is a government body and they approved the listing.
These news go a long way to show how much Btc is outgrowing the stupid bad reputation of the past, and towards real recognition as a solid asset.
Hei, swiss man! I just want to ask you that considering the cancelation of the Bitcoin hard fork, what do you think, will it lose much of its value? Thanks a lot and hope the best for you!
Logically it should have gone down in price due to the cancellation of 2X. That because 2X offered a free coin. Investors would have withdrawn bitcoin from exchanges, thus removing coins for sale and forcing the price higher. So cancelling 2X should have the opposite effect.
But this is bitcoin. Everything and anything is possible. Maybe it’s $10k next week. Maybe $5k.
Yep, I feel that it's very hard to predict right now, I din't know what to say, guess I will wait more. Thanks a lot!