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Nasdaq Plans to Introduce Bitcoin Futures

bloomberg.com

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Re: Nasdaq Plans to Introduce Bitcoin Futures

#21

Post by reverend_gonzo »

misja111 wrote: post #18
fragsworth wrote: post #11

Hopefully it's not cash settled like the CME. That is the worst idea ever, and will probably cause a lot of people to get screwed over by market manipulation. Especially since the CME is basing the cash settlement price on a single exchange: GDAX. Anyone can go to GDAX and crash or spike the price for one minute at 4:00pm any day and trigger a bunch of margin calls on the CME. Especially considering how easy it is to…

>> it really should be "bitcoin settled". Sorry but you can't have futures on bitcoins that are settled in bitcoins.

Why not? CME has futures that are settled with physical delivery.

It definitely makes it a pain for post-settlement management, and would likely prevent a lot of people from trading those futures, but why exactly is it not possible?

Re: Nasdaq Plans to Introduce Bitcoin Futures

#22

Post by brndnmtthws »

fragsworth wrote: post #11

Hopefully it's not cash settled like the CME. That is the worst idea ever, and will probably cause a lot of people to get screwed over by market manipulation. Especially since the CME is basing the cash settlement price on a single exchange: GDAX. Anyone can go to GDAX and crash or spike the price for one minute at 4:00pm any day and trigger a bunch of margin calls on the CME. Especially considering how easy it is to…

Agreed. It's kind of a farce, and it seems like they're merely hijacking the Bitcoin name without actually dealing in Bitcoin.

Re: Nasdaq Plans to Introduce Bitcoin Futures

#23

Post by wmf »

brndnmtthws wrote: post #22
fragsworth wrote: post #11

Hopefully it's not cash settled like the CME. That is the worst idea ever, and will probably cause a lot of people to get screwed over by market manipulation. Especially since the CME is basing the cash settlement price on a single exchange: GDAX. Anyone can go to GDAX and crash or spike the price for one minute at 4:00pm any day and trigger a bunch of margin calls on the CME. Especially considering how easy it is to…

Agreed. It's kind of a farce, and it seems like they're merely hijacking the Bitcoin name without actually dealing in Bitcoin.

Apparently there have been cash-settled futures on a whole bunch of commodities for years now, so this sounds like another case of "I just discovered how finance works and I don't like it".

Re: Nasdaq Plans to Introduce Bitcoin Futures

#24

Post by hendzen »

Kiro wrote: post #14
chollida1 wrote: post #10

My guess is that this is probably pretty meaningless. There are a few things going against them. - The CBOE and CME are both much larger futures exchanges and are going to be offering futures first - since you can't net out futures contracts from different exchanges this means they tend to become winner take all > One way Nasdaq seeks to differentiate itself seems to be in the amount of data it uses for pricing the d…

One difference is that NASDAQ is a name everyone in the world knows while CME is fairly anonymous. Yes, I know they are bigger but I can assure you that if you ask random people in my country most would know NASDAQ while very few would know CME. Seeing NASDAQ is adding it will add to the hype.

"CME is fairly anonymous".

What planet do you live on?

Re: Nasdaq Plans to Introduce Bitcoin Futures

#25

Post by koolba »

londons_explore wrote: post #20

Can an expert explain for the less informed: * Do futures markets typically stabilize the price of a commodity? * Who loses out if a futures contract can't be fulfilled (for example due to lack of liquidity in the underlying market)?

> Do futures markets typically stabilize the price of a commodity?

Kind of. It doesn't necessarily stabilize the prices of the commodity so much as allow the transferring of the risk associated with price movements.

> Who loses out if a futures contract can't be fulfilled (for example due to lack of liquidity in the underlying market)?

The exchange acting as the clearing house is on the other side of each contract so they'd be left holding the empty bag. Exchanges deal with this by settling futures daily (so net cash movement based on current price) and by setting margin requirements on the members buying or selling contracts. The margin requirements vary based on the volatility of the future and for something like Bitcoin I wouldn't be surprised if was 100%.

What's particularly cool / safe (and interesting if you're a finance nut) about futures vs. actual trading of Bitcoins is that there is zero crypto involved. Everything is cash settled in dollars.

Re: Nasdaq Plans to Introduce Bitcoin Futures

#26

Post by brndnmtthws »

wmf wrote: post #23
brndnmtthws wrote: post #22

Earlier quoted context omitted.

Agreed. It's kind of a farce, and it seems like they're merely hijacking the Bitcoin name without actually dealing in Bitcoin.

Apparently there have been cash-settled futures on a whole bunch of commodities for years now, so this sounds like another case of "I just discovered how finance works and I don't like it".

Bitcoin differs from commodities like gold in that it's something which can be trivially transferred electronically. It doesn't make much sense to 'buy' cash instruments when you can just get the real thing.

Re: Nasdaq Plans to Introduce Bitcoin Futures

#27

Post by whatok »

Kiro wrote: post #14
chollida1 wrote: post #10

My guess is that this is probably pretty meaningless. There are a few things going against them. - The CBOE and CME are both much larger futures exchanges and are going to be offering futures first - since you can't net out futures contracts from different exchanges this means they tend to become winner take all > One way Nasdaq seeks to differentiate itself seems to be in the amount of data it uses for pricing the d…

One difference is that NASDAQ is a name everyone in the world knows while CME is fairly anonymous. Yes, I know they are bigger but I can assure you that if you ask random people in my country most would know NASDAQ while very few would know CME. Seeing NASDAQ is adding it will add to the hype.

Random people in your country are not the target audience for this.

Re: Nasdaq Plans to Introduce Bitcoin Futures

#28

Post by elmar »

koolba wrote: post #25
londons_explore wrote: post #20

Can an expert explain for the less informed: * Do futures markets typically stabilize the price of a commodity? * Who loses out if a futures contract can't be fulfilled (for example due to lack of liquidity in the underlying market)?

> Do futures markets typically stabilize the price of a commodity? Kind of. It doesn't necessarily stabilize the prices of the commodity so much as allow the transferring of the risk associated with price movements. > Who loses out if a futures contract can't be fulfilled (for example due to lack of liquidity in the underlying market)? The exchange acting as the clearing house is on the other side of each contract so…

> volatility of the future and for something like Bitcoin I wouldn't be surprised if was 100%

100% is really farfetched more like 30%

Re: Nasdaq Plans to Introduce Bitcoin Futures

#29

Post by deadmetheny »

virtuexru wrote: post #19

Ah yes Bitcoin; the completely useless electricity waster is finally hitting Wall St. I wonder how the futures will affect price & how much of it will be settled in actual BTC vs USD. AM I DOING THIS RIGHT HACKER NEWS? LUL

>how much of it will be settled in actual BTC vs USD

Exactly none of it, considering that Bitcoin as a currency is fairly useless unless you're buying drugs or you're a botnet operator.

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