At $25 per contract and bitcoin trading at $11,000 your controlling $25x11,000 or $275,000. Now 25% margin is required (to my knowledge and some brokers may require more) so your required to maintain $68,750 cash or cash equals in your account. But let's say we have a swing like we did the other day $2000. $25x$2000 = $50,000. OUCH that means you just lost $50,000 unless it recovers, but if you do NOT have enough to maintain the $68,750 your position will be closed and you are screwed. So trading will be only for the fat cats that have millions in their accounts and can weather a $50,000 temporary down turn. So why would anyone want to trade the market on bitcoin? AHHHHHH it's a very easy market to manipulate for the fat cats and I think this is some of the reason for the price rise currently.
Let's say Imscrewingtheavg Joe Investment company has purchased 100k bitcoin . Hey there are some that have that much or friends that do. So they are selling contracts and the price is going against them and it's getting close to March delivery. Out of the blue you get HUGE 5000 sell orders across several exchanges. This clears out the bids, triggers stop losses, and creates a domino effect to the downside. The market follows which they are cleaning house on the average Joe, and with the money they make off the contracts they close out, they buy all their bitcoin back at a cheaper price. This happens in large markets such as gold and silver which are much more liquid then bitcoin so it can definitely and will most likely happen here. So keep this in mind and do NOT get spooked out of the market.
But here is an update of the chart I posted 2 days ago. Keep in mind there are multiple scenarios but these are probably the two most likely in my opinion. Now I have added in the $9500 range some bitcoin , and I have held out to see what happens. A break of $11,500 I will enter a trade for the $13,500-$15,000 level. If we drop down to the $8100, which was our original target level, I will add some more and look for a trade as well. Due to the publicity, and the fact Coinbase can hardly keep up with new accounts and transactions (now more accounts then Charles Schwabb), I just do NOT see a major correction here but you never know. If I want to trade , I want a hedge and a stack of bitcoins to hedge with. So I see more accumulating by larger institutions in the coming weeks leading up to dooms day! With only about 14 million or less coins available, and many not wanting to sell the ones they hold, I see the likely hood of a HUGE issue, so it could get crazy from here. It's uncharted waters but I want to be long here as in my opinion demand will out weigh supply going into trading. Time to make some money!
In closing, and in my opinion, the market is a poison apple' and I am not biting. It is clear why they wanted regulators to bless the product prior to trading, even though they do NOT need permission to implement a new product. Yes they can self certify and it was odd when I saw they were in discussion with regulators. But money speaks and I'm sure some hands were greased. I can understand the concern by many about this having an effect on the financial markets especially if we see a derivatives collapse like the housing market where brokerages can not cover the losses from their clients leading to bankruptcy. (Lehman Brothers comes to mind). This could effect the economy so they will want to hedge and they may do that by buying coins on the open market to hedge.
Of course collapses lead to regulations!
as you can read on CBOE web page:
"Cboe Bitcoin (USD) futures are cash-settled futures contracts that are based on the Gemini auction price for bitcoin in U.S. dollars. "
You can check auction data at
This are the data from last 2 days:
12/05/2017 10pm CET ETH/USD — — — —
12/05/2017 10pm CET BTC/USD 40.0507 ~473K $11,811.865 0.14%
12/05/2017 12pm CET BTC/USD 0.0284 ~334.21 $11,754.645 0.65%
12/04/2017 10pm CET ETH/USD 2.0936 ~968.60 $462.645 0.45%
12/04/2017 10pm CET BTC/USD 32.6442 ~375K $11,483.865 0.13%
12/04/2017 12pm CET BTC/USD 0.0200 ~233.62 $11,681.00 2.81%
Which means that on 4th December by trading 34 BTC I could influence CBOE future market.
On 5th I would need only 40 BTC
any idea how to play it ?
Cboe Bitcoin (USD) futures are cash-settled futures contracts that are based on the Gemini auction price for bitcoin in U.S. dollars.
Limit is 1000 net contracts at given expiry date or 5000 at any.
One contract on bitcoin
It seems that it is really based on Gemini :))
Additional twist is that the future settlement will be based on "Gemini auction price" and not ongoing market. So it want even be 1.2% of 24h trading volume but fraction of it. I have to check the detail what % of gemini daily volume goes via auctions. I guess it would take couple of old-time btc traders to swing it. One can also think about arbitraging gemini if they start skewing. What was the name of multi exchange platform for btc trading - I know I've seen it once.