This guy says futures are a failure

Discussion in 'Cryptocurrencies' started by SoesWasBetter, Jan 1, 2018.

  1. sle

    sle

    Are you a market maker in futures? Yeah, thought so :)

    It has nothing to do with "getting paid in bitcoin" as a speculator. A derivatives market maker is NOT as speculator, she/he does not like taking delta risk unless amply compensated for. In a world where there is no continuous liquidity in the derivative itself, a market-maker would be reluctant to make continuous markets. That's because if they get into a position, they don't know when they can get out and they don't like carrying naked delta risk. A physical delivery or an EFP market would have given them an ability to lay that risk off (transforming delta risk into a less scary basis risk).
     
    #11     Jan 2, 2018
  2. truetype

    truetype

    Big SP futs came out after ValueLine futs (similarly to CME vs CBOT bitcoin futs), and soon took nearly all the market share. ES futs were a hit right off the bat. There was pent-up demand for a smaller-dollar instrument. But hey -- it's every American's right to be "sure" of things that aren't true!
     
    #12     Jan 2, 2018
    sle and speedo like this.
  3. Not sure why that phys delivery argument holds water.

    Only thing I can see is the inability to short btc in the cash mkt.
     
    #13     Jan 2, 2018
  4. sle

    sle

    Because at the moment if you have a bitcoin futures basis position on, you get
    (a) no margin relief, in fact futures exchange is agnostic of any position in the u/l
    (b) no guarantee that the two will converge - have you see that auction description?
    (c) no free sex
    Most market makers will have a problem with at least two out of three.
     
    #14     Jan 2, 2018
    i960 likes this.
  5. i960

    i960

    IMO the lack of physical settlement or reasonable fungibility, while a significant issue, is more of a symptom rather than a cause. It's definitely not the first financial future, but it certainly shares traits with other problematic futures in the past that have settlement and/or delivery issues. The symptomatic part here is that the inability to even have a reasonable infrastructure for delivery represents futhre problem withs the underlying or atleast it's current "implementation."
     
    #15     Jan 2, 2018
  6. Both bitcoin futures have been trading for less than a month and people have already called them a failure?
     
    #16     Jan 2, 2018
    johnarb likes this.
  7. henry76

    henry76

    Could it be a reflection of the slow failing of bitcoin itself , while it was going up exponentially it was interesting , now it's slowly becoming boring and ultimately replaced and irrelevant.
     
    #17     Jan 3, 2018
  8. Careful. BTC has a habit of making one look foolish.
     
    #18     Jan 5, 2018
  9. henry76

    henry76

    I doubt it , I was all for it earlier in the year, check my posts , because it was going up, even if it goes up from here I don't believe we will see the steep rises again , simply because to go up 1000% + from here takes a significant proportion of the world's investment wealth, what's more competitors are catching and if nothing else diluting cash spent on crypto currencies from just bitcoin to many others , some of which will probably turn out to be better as the instigators have had the benefit of a little hindsight as to the shortcomings of bitcoin, and perhaps because without demand Bitcoin is worthless.
    However we shall see.
     
    #19     Jan 6, 2018
  10. @sle you had the futures pegged correctly in various posts, but you fail to recognize what is happening. Bitcoin will be far above $50,000 by the end of 2018. Fortunes will be made in the next two years as specific products based on the blockchain technology come into play. Most on ET will miss out because they are so superior minded and can not think beyond tulips and other ridiculing comments.
     
    #20     Jan 6, 2018
    johnarb likes this.