Jul 08, · Bitcoin Futures are futures contracts that allow speculators to place a bet on the price of Bitcoin without having to own it. The first Bitcoin Futures was available to trade on December 10, Chicago Board Operations Engine (CBOE) and the Chicago Mercantile Exchange (CME) listed the Bitcoin Futures trading in December Bitcoin futures trading is available at TD Ameritrade. Quotes and trading capabilities for these futures products are available on our thinkorswim trading platforms. The Bitcoin futures contract trades Sunday through Friday, from 5 p.m. to 4 p.m. Central Time (CT). A single BTC contract has a value of five times the value of the BRR Index and is quoted in U.S. dollars per one bitcoin. The tick increments are quoted in multiples of $5 per bitcoin, meaning a one-tick move of the BTC future is equal to $
Futures trading on bitcoinHow to Trade Bitcoin Futures: A Step-By-Step Guide
Advocates of Bitcoin futures argue that their emergence leads to more efficient price discovery —since traders and investors can now short Bitcoin just as easily as going long. However, in the years since they first launched, Bitcoin futures have been frequently scrutinized by industry experts—many of whom argue that some of the platforms offering Bitcoin futures products are not compliant with relevant regions, while some may be operating illegally.
The lack of regulatory oversight on some Bitcoin futures platforms has led to accusations of market manipulation. Matters came to a head in October , when BitMEX—once the most popular Bitcoin futures exchange by trading volume—was charged with operating an unregistered trading platform, among other things.
Moreover, the United Kingdom's financial watchdog, the Financial Conduct Authority FCA recently announced a ban on certain types of cryptocurrency derivatives for retail customers, including futures and exchange-traded notes ETNs —signaling a potentially worrying trend among regulators. Despite the first Bitcoin futures appearing as recently as , cryptocurrency derivatives are now by far the most popular way to trade Bitcoin.
As per data from CryptoRank, Bitcoin futures now account for Though the vast majority of this trading volume is accounted for by institutional investors, the increasing accessibility and simplicity of futures products, as well as the growing range of available educational materials, have helped make Bitcoin futures accessible to casual investors.
However, a wide variety of alternative derivatives products have begun to emerge as of late, some of which may prove more attractive to both institutional and retail traders. One of these alternatives includes Bitcoin options—a type of derivative product that is similar to futures but enables more complex trading strategies. According to a recent report by crypto analytics platform Skew, Bitcoin options are rapidly catching up to Bitcoin futures in terms of trading volume and open interest, signaling rising interest among traders.
Options are starting to play catch up with the more mature futures market pic. The value of cryptocurrencies like Bitcoin is largely influenced by fluctuations in its supply and demand dynamic—with a sudden increase in demand frequently leading to increased value, while a sudden increase in supply can suppress the price. However, because Bitcoin futures are a derivative product, buying and trading them has little to no direct effect on the supply of Bitcoin on the spot market.
But with more exchanges beginning to offer derivatives products like futures, more traders than ever before can now trade futures just as easily as spot Bitcoin, to quickly determine which best fits their needs. They will take the difference which is USD from your so-called margin account and give it to Mark. This kind of settlement is performed on the expiration date of the futures contract as well as every day of trading based on the current price of Bitcoin.
In order to ensure that you have money in your margin account, you should put up an initial margin at the beginning of the contract. The minimum margin is also defined by the broker. If your money in the margin account falls from your initial margin to the maintenance margin or minimum margin, then the exchange triggers a margin call where the broker requests you to fill your margin account to the initial margin.
If you are unable to fill the margin account even after the margin call, then the broker has the right to sell your Bitcoins at a price that is more unfavorable than waiting for a good opportunity. So, it is better to avoid margin calls. So, Bitcoin Futures trading can be done on various places which include:. While you know how to trade Bitcoin Futures, it is also necessary to understand where to trade them.
You should find a trustworthy exchange which offers good security and an easy to use interface. So, it is better to do proper research before you choose an exchange platform to begin trading.
Several platforms, financial institutions, and various cryptocurrency exchanges have signaled to launch Bitcoin Futures on their platform. CBOE is one of the largest cryptocurrency futures exchange platforms in the world. It is also the first exchange platform to launch Bitcoin Futures. Bitmex is a cryptocurrency exchange that offers Bitcoin Futures trading to everyone except to the U. TC Ameritrade is one of the largest brokerage firms in the world which offers Bitcoin Futures Trading.
It is also a designated self-regulatory organization registered with the NFA. Along with these platforms, there are various other platforms as well like, OKEx, Nasdaq, Bakkt, and many others. Also, the Bitcoin Futures has gained a lot of support from both the regulators and investors. But always remember that for futures trading, there is a winner and a loser.
There may be some situations where you could end up with less money than you started with, so you should always be ready to take the risks. If you are an experienced trader, then there are chances that Bitcoin Futures can add an interesting twist to your cryptocurrency investment journey. Renuka is an active blogger and guest writer at Bitcoinik.
In her experience, she has worked as a crypto-journalist and has also contributed to the blockchain, cryptocurrency, and fintech industries. You can contact her at Linkedin. How to trade Bitcoin Futures? Crypto Education exchange news. Last updated Jul 8, What if the price of Bitcoin increases even after you sell the asset?
What to do in such a situation? Yes, it is possible! In the case of financial assets like Bitcoin, Bitcoin Futures can be used. What are Bitcoin Futures? Related Posts. Dec 7,