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Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

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Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#121

Post by omellet »

andruby wrote: post #64
LrnByTeach wrote: post #54

Earlier quoted context omitted.

Futures contract has TIME value, so they are usually higher than the SPOT price, please check this link for detailed explanation . https://www.investopedia.com/terms/f/futurescontract.asp Thought it is not exactly same, but similar case is Where you pay Premium with Stock Options to have the right RIGHT to buy the stock one month from now. Regarding cex & bitstamp they are exchange out side of USA, each of them have…

Is 11% not a huge time value premium for something that expires in a month? Can we compare the time premium with the interest rate? I have traded options, but never futures. With options there several components that increase the premium besides just the time component. According to [0] futures shouldn't have a time premium because both parties are obligated to to fulfill the contract. As you stated in the OP, the 11…

It is a huge premium. In reality it should only be the future value of the current spot, given the current interest rate. For other types of futures (oil, grains) that have storage costs or seasonality there are other factors that affect the difference between the spot and future price, but for financial futures (especially cash-settled) it should be nearly no difference for a one-month expiry.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#122

Post by d--b »

nonameisfinetoo wrote: post #116
d--b wrote: post #80

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.…

CBOE BTC futures are cash-settled

Regardless of the settlement of the future, you still need bitcoins to enter the other side of the trade

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#123

Post by d--b »

mathgenius wrote: post #111
d--b wrote: post #108

Earlier quoted context omitted.

Mmmh, why do you need your coins sitting on one exchange? Can't you just take them out once your transaction is done?

Sure, but you still need to put funds into the exchange to buy the coin in the first place. And likely you would leave the coins there in case the trade goes the otherway. Managing that many coins in your own wallet is a whole other headache. But I guess your point is to not leave much on the exchange at any one time.

True, you're exposed to the exchange at least to enter and exit the trade. But you'd expect sophisticated arbitrageurs to know how to manage their own bitcoin wallets.

Perhaps the discrepancy is there because such people don't exist yet.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#124

Post by gabemart »

sametmax wrote: post #25
idibidiart wrote: post #19

Is this just legalized gambling?

That's pretty much what people use stock market for anyway. Most investors are no warren buffet, they bet at best on educated guesses.

It's a shame that there isn't a common word in English to distinguish between positive-expected-value gambling and negative-expected-value gambling. They are fundamentally different pursuits.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#125

Post by nawtacawp »

user5994461 wrote: post #73
LrnByTeach wrote: post #40

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…

>>> case 1: Bitcoin price shoots to $25,000 >>> case 2: Bitcoin price drops to $8,000 case 3: one of the exchanges canceled your order shortly after they were done. case 4: the exchange refuses to pay you out for whatever reason they invent. case 5: the exchange goes bust, either seized by the police, hackers or the owner outright left with all the money. In all these cases. You are likely to loose 100% of the sum yo…

Just want to add for those new to btc, these are not far fetched scenarios — they have all happened in the past.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#126

Post by vvillena »

etr-strike wrote: post #113
xHopen wrote: post #41

Buy Ethereum

The Ethereum network is imploding under its own weight. Running an ethereum node has become quite expensive and requires very state of the art hardware just to keep up. There’s a reason bitcoin chose the constants it did.

What? 2GB of RAM and 15GB of decently fast storage (preferably SSD) are the only hard requirements. That's not state of the art by any means.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#128

Post by traderThrowAway »

LrnByTeach wrote: post #40

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…

If someone wanted to borrow US$1m from you, and gave you Bitcoin as collateral, what interest rate would you require?

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#129

Post by xHopen »

vvillena wrote: post #126
etr-strike wrote: post #113

Earlier quoted context omitted.

The Ethereum network is imploding under its own weight. Running an ethereum node has become quite expensive and requires very state of the art hardware just to keep up. There’s a reason bitcoin chose the constants it did.

What? 2GB of RAM and 15GB of decently fast storage (preferably SSD) are the only hard requirements. That's not state of the art by any means.

They don't know what they say , but what the news tell them. I run an Ethereum node in a crappy hardware just for the network. and , as they may not know, you can run light ethereum nodes as they https://slock.it/ethereum_computer.html do. They are all focus in price , we are focus in technology and of course MOON

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#130

Post by pbhjpbhj »

moduspol wrote: post #118
d--b wrote: post #108

Earlier quoted context omitted.

Mmmh, why do you need your coins sitting on one exchange? Can't you just take them out once your transaction is done?

From my experience, the way you find out there's an issue with the exchange is when you see people posting on /r/bitcoin about having waited weeks for their withdrawal to be processed. Meanwhile the exchange continues to accept deposits.

Presumably you can watch the exchange's wallets and see anomalous behaviour relatively easily?
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