A Look at Cboe Bitcoin (USD) Contract Specs BITCOIN | NOV 17, 2017, 10:22 AM A Look at Cboe Bitcoin (USD) Contract Specs BY RUSSELL RHOADS, CFA One of the most discussed topics in the financial world recently has been bitcoin and the technology behind bitcoin. A few weeks ago Cboe Global Markets announced plans to launch futures contracts based on bitcoin prices and that process is undergoing regulatory review. However, we do have the potential contract specifications available. For those who want to get prepared for the launch of Cboe Bitcoin Futures here are some highlights. The underlying ticker will be XBT and the ticker to see the contract settlement values is XBTS. The contract multiplier will be 1 so if a contract is trading at parity with bitcoin it will be worth about $7900 based on current pricing. The minimum tick for a directional, non-spread trade is 10 points or $10. A spread trade will have a much smaller tick of 0.01 bitcoin or $0.01. Several expirations may be listed. Standard, or monthly, contracts may be listed to expire for three continuous months and farther out for months on the March expiration cycle (Mar, Jun, Sep, Dec). There may also be up to four serial weekly expirations. Standard contracts will expire on the 2ndbusiness day before the third Friday of the month which typically will be a Wednesday. Trading hours run from Sunday night at 5:00 pm to Friday afternoon at 3:15 pm. Specifically, the extended trading hours (ETH) session starts Sunday at 5:00 pm and ends Monday at 8:30 am with the ETH sessions for the rest of the week (Tuesday – Friday) consisting of opening at 3:30 pm the day before and ending at 8:30 am. Regular trading hours are Monday – Friday from 8:30 am to 3:15 pm, just like the VIX futures. All these time periods are Chicago time. So there are the some of the need to know pieces of information about Cboe Bitcoin Futures. The question I am constantly hearing is, “How will the futures prices relate to spot bitcoin pricing”, and the best (and most honest) answer I can give is, “I don’t know”. I’ve done academic work on the launch of new listed products in the past and prior assumptions about new markets often are off the mark. I’ve heard arguments for the futures trading at both a premium and a discount to the spot price, personally I think the best strategy is to see what the market tells us when bitcoin futures are available for trading. To see the contract specs laid out or submit bitcoin related questions visit – http://cfe.cboe.com/cfe-products/cboe-bitcoin-(usd)-futures Also, I did write a blog discussing the volatility of the daily bitcoin price changes and comparing that to VIX which yielded an interesting outcome – http://www.cboe.com/blogs/options-h...vs.-vix---what-has-been-more-volatile-in-2017 XBT
Commodities have always been volatile, Bitcoin fits the profile, so not sure I understand all the fuss, look at sugar, silver, oil. Not sure putting up an add in newspaper accomplishes anything, if he wanted to communicate something he should have done it directly to CME, or just saying we won't support those contracts. I think he is just trying to get some cheap publicity by exploiting topics that are divisive. Like attacking vix sellers and bitcoin, both have divided camps and its very easy to win followers over by attacking one side. You can write about anything these days and it won't get noticed, but if you attack Trump or Hillary, you automatically get notices and followed by one of the camps. Bitcoin is the same way, any article will attract haters and believers and engage them into a battle giving the author a cheap way for exposure.
I don't think that is what he is doing. He actually fully supports the trading of BTC, he just wants it to be on a different exchange. I don't see what's wrong with that and the more I think about it, the more I agree with him. Many people here seem to forget that the CME almost went under in 1987.
I recently raised a ticket with IB asking for them to enable 50% reduced intraday margin on RTY (Russell 2000 mini futures) on the CME, given that RTY now has almost 3 times the volume compared to TF on ICE. The IB rep from the risk department replied back saying they did not offer intra day margin on ANY CME product anymore. They have in fact reduced the number of markets they used offer reduced intraday margin on at CME eg Currency Futures, but I replied back that he wasnt totally correct because they do in fact offer reduced intraday margin on ES,NQ,YM. After i pointed this out, he replied back saying they still werent going to reduce the margin on RTY any time soon or maybe even never. I know he was some low level rep so could have been clueless, but given that IB have been increasing margins across the board, i can see IB margin requirements getting even tighter on all products on exchanges that list BTC futures, especially when the BTC futures become volatile.
If you want to avoid liquidation issues from opening or weekend gaps, just don't have the market close. Then you can pick a margin requirement that corresponds to whatever a big move is and how fast the broker can blow out the customer's position when he's getting close to a call and from the exchange's side, the problem is solved. I'm sure some algo would be happy to offer liquidity for the right price at midnight Saturday or whenever if you keep the market open. Closing the market just adds risk.
What price btc futures vs the real deal? Depends on what the crims who kite btc 24/7 decide to do. They will have to move some of their booty to manipulating the futures in concert with their pimping of the btc price on various fourth world craphole exchanges.
No need to get sensitive Mr gambler , it was a metaphor , sure technically they are just an exchange not a casino , same goes for Wall street , it isnt technically a casino , but you can call either a casino .
BTW , IB can have an increased margin requirement for shorting BTC , like what they did with VIX etfs shorts .