101–110 of 220 posts
Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...
I am trying to understand risks with arbitrage for professional traders with BTC spot (at Coinbase gdax) and CBOE Futures contract. Let us say, some professional trader "Short sell CBOE Future contract & Buy BTC Spot at Coinbase simultaneously" At the time of this writing, Futures contract short sell @ $18700 and BTC Spot buy @ $16700 simultaneously. http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures you wait…
As others pointed out, when you buy/sell futures, you risk counterparty risk. But it's not that bad because that exchange is really good and people entering the market pay margin calls every day. There is also a financing cost (ie. the cash you use to pay for your margins, transaction costs, and to buy the bitcoins will not pay you any interests over the time of the position). But again, the effect is not very large.…
The real risk for arbitrage is with the crypto exchange itself: these can go bust, or disappear overnight. You wanna keep $1M sitting on one of these exchanges?
Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...
The markets are not as independent as they might seem. If the futures market gets ahead or behind of the other BTC markets, it creates opportunities for arbitragers to profit from the difference which has the effect of reducing the gap. It doesn't matter that they are cash-settled. For example, if lots of money start pouring into Bitcoin futures, the futures price will rise above the price on BTC exchanges. It will t…
Of course there a probably traders doing other kinds of trades that have a different effects on the prices, but it's quite tricky to analyze, compared to a physically-settled contract.
Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...
As far as I can tell it's just a way to outsource holding the BTC. A BTC future can be perfectly hedged by taking a loan until the settlement date and using it to buy 1 BTC, holding it until settlement and then selling, so that's probably what the counterpart selling the future is doing.
I think Bitcoin will become the principal store of crypto value. There will be other cryptos for different uses and Bitcoin will serve as a medium of exchange among them and as a long term store of value, it probably won’t become the everyday currency we all want to use. Hopefully these futures will reduce its volatility and help stabilize the price
There is a theory that a recent bump in Litecoin prices was due to traders wanting to move Bitcoin between exchanges and Bitcoin is too slow.
I am trying to understand risks with arbitrage for professional traders with BTC spot (at Coinbase gdax) and CBOE Futures contract. Let us say, some professional trader "Short sell CBOE Future contract & Buy BTC Spot at Coinbase simultaneously" At the time of this writing, Futures contract short sell @ $18700 and BTC Spot buy @ $16700 simultaneously. http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures you wait…
Tax treatment of futures is AMAZING The margin is free and its much greater (usually) than what you get in other markets
Beside, margin in futures mean different think than margin on stock.
Yes, futures tax treatment is great. Index options also get the same tax treatment
Is someone able to find how the cash settlement of these futures handle forks? I can find CME's policy but nothing for CBOE: http://www.cmegroup.com/education/cme-bitcoin-futures-freque... > 31. What is CME Group’s policy regarding hard forks? > CME is developing a hard fork policy for capturing cash market exposures in response to viable forks. The policy may involve cash adjustments to position holders or listing r…
Earlier quoted context omitted.
As others pointed out, when you buy/sell futures, you risk counterparty risk. But it's not that bad because that exchange is really good and people entering the market pay margin calls every day. There is also a financing cost (ie. the cash you use to pay for your margins, transaction costs, and to buy the bitcoins will not pay you any interests over the time of the position). But again, the effect is not very large.…
The bitcoin exchanges have plenty of liquidity, and executions happen in less than one second. The real risk for arbitrage is with the crypto exchange itself: these can go bust, or disappear overnight. You wanna keep $1M sitting on one of these exchanges?
Earlier quoted context omitted.
The bitcoin exchanges have plenty of liquidity, and executions happen in less than one second. The real risk for arbitrage is with the crypto exchange itself: these can go bust, or disappear overnight. You wanna keep $1M sitting on one of these exchanges?
Mmmh, why do you need your coins sitting on one exchange? Can't you just take them out once your transaction is done?
Earlier quoted context omitted.
They do verify transactions, and are incentivized to do so by transaction fees
They don't verify transactions actually. That is what nodes do. They retrieve valid transactions from nodes, order them, and then hash them according to the consensus proof-of-work algorithm, which in this case, is SHA-256, until it produces a block that will satisfy the node consensus requirements.
Non-mining nodes can only verify transactions for themselves , which helps them stay on the chain of their choice but does not extend any chain.