Topic: Everything you wanted to know about BTC futures but were afraid to ask! - page 7. (Read 4054 times)

How to get details on total orders of bitcoin future and ordered prices as well as dates of expired contracts on CME and ICE? It is important to have some picture for the future price and movements of bitcoin. Could you help me, please.

Of course I haven’t a clear answer.
In my opinion I see only downsides for CME and ICE to be caught playing with their customer’s money.
The main point is that this would ruin their main asset: their credibility as a top standing counterpart to trade with trillions of dollars-worth of derivatives.

I think it is not worth for them.
But it will be interesting to see how things get rolling in the next squeeze: traditional markets are not well prepared for the volatility in crypto’s.

You likely know that I already responded in the WO thread.  Of course, I don't mind to continue such conversation over here to the extent that you or any other member wants to continue such conversation in this thread. As you can likely see from my response, I am not exactly convinced that there might not be fractional reserve practices going on that are not really tested or even revealed unless really extreme upwards BTC price conditions that are surely possible in bitcoin. 

Marking to Market the positions, or margining, is something it is still on the to do losit of this thread.
Anyway here you get a glimpse of the problem.
I got a question form an user, and used it to clarify some point that could be easily misunderstood b non-technical people apporaching the matter:



This is a naive question, bringing me some interesting other question, I will later try to answer.

Go for the naive part: Bakkt has the Bitcoin? YES.
How do I know? Contract specification.

When you own a future, you are constantly (well, at COB) called to margin your positions. This means that when you open a position in a future you are required to post a certain amount of cash along your position. You cannot open a position if you haven’t a big enough amount of cash in a collateral cash balance at the exchange. This amount is set by the exchange to cover the daily variation of the underlying (BTC, in this case, but this mechanism is valid for any underlying). At the end of the trading day this cash  balance is adjusted to reflect the P&L of the future position: money is poured in if your future position has gone in the right direction, otherwise the exchange take from this account the daily loss (and transfer it to your counterpart). In case the residual cash balance is lower than the initial margin, you are called to refill your margins (the infamous “margin call”, or to close forced into closing the position). This means two things: firstly the exchange has no credit risk: every counterpart has a daily margining so their exposure is not too big, second the P&L is actually credited daily in the exchange, so frauds are very limited.
So, can BAKKT exit scam you? Very unlikely, as this is the opposite way this business works (also:  BAKKT and maybe CME would suffer a tremendous reputation as risk putting their own existence at risk in case of a default).

The hard part in all this reasoning: is this margining all done in BTC? As per my explanation it should. But I don’t remember anything like that in the product specification. I will check later, when real life settles a little bit.
I am going also to put this answer in my future related thread, as it is a point I would have liked to cover, but I actually didn’t.

Just look at my signature and have a read:
Stock To Flow Model: Modeling Bitcoin's Value with Scarcity

I want to know the future of Bitcoin like? Especially, does the third halving event in Bitcoin history in the middle of May 2020 affect anything? The supply of Bitcoin released as a mining reward was once again cut. Will halving drive the price boom of Bitcoin?

I understand your point, being delusional about bakkt launch is easy, and I also expected more volumes at the start.
But we have to remember that this was one of the most ambitious plan to smuggle bitcoin into traditional finance. It had to take time, and now it’s starting to grind (we still are miles away from full potential in my opinion).
Regarding Binance and IEO, I don’t know the subject enough, but in my opinion they are long term irrelevant (but again, I might be wrong here).

What is Bakkt? In my eyes, this is very painful. We waited months for this decision. We said corporate capital will enter the market. But it didn't. The biggest move in 2019 was Binance and IEOs. It's not popular anymore. Each institution can receive bitcoin in different ways.

This thread has been translated in Russian by FontSeli

Bce, чтo вы xoтeли бы знaть o фьючepcax нa BTC

If you think this thread or any other of my threads is worth being translated in your onw local board, please do! I will be happy to provide assistance!

To anyone interested I posted a new thread, similar ot this one, about Bitcoin Options.

Everything you wanted to know about BTC options but were afraid to ask!

As I explained in the post, the subject is very wide, so I focused only on some aspects. Please let me know (commenting the other thread), if you are inteerested in some particular aspect I might have not well detailed.

thanks for explaining out . im one of those users who are confuse about those term " futures " i also thought that future means the status of bakt or btc in the future but after i read this thread im now aware and educated . its still funny when i remember some old threads on the past that ask if what is the future of btc and most of the answers that i read is they say that btc will have a good future and its price will reach up to 20k to 300k usd  ,  lol  .

Surely, I was not much aware of this issue at all, This is a good finding for this purpose and it will make sense clear that nothing is not an easy task for the future purpose within this blockchain system, it's really an appreciated task which has done and I also believe that Bakkt is not yet ready to take the challenges to the favor of Bitcoin, one of the main problems in this platform is the price volatility so Bakkt will not capable to do something regarding this issue, so thins will remain same and Bitcoin will gain more space within this system, I think until a set of regulation will be there, nothing will change in this system, so at least a policy should be established for the favor of this platform.

No AFAIK you won't be able to do that on Bitmex neither on any futures exchange I know. BTC futures on bitmex aren't "vanilla", they are inverse futures like most of the BTC futures of the cryptoverse. That is to say you don't buy and sell btc futures contracts but USD futures contracts instead, and the calculations of your profits(PnL) are done on the inverse of the price.
It's not really easy to explain in layman terms but it's the same as betting on the USD price against BTC with satoshis, but the inversion is done for you.
The altcoin futures are generally vanilla but they are against btc, and they are not asset-settled like on Bakkt but cash-settled in btc. So you can't apply this method on them because you won't receive or send the assets at the expiry date but the value of those cryptos in btc at the spot market price of the day, instead. So for example, if the price of EOS is higher than your sale price(ie the entry price of your short position) you will lose money because you will virtually give the value of one EOS at the spot market price of the day and only receive the price of your sale.

I hate to quote myself, but Hueristic's attempt to explain to you, crazy-joe, by use of a dictionary definition, caused me to look at the portion of fillippone's response that you quoted.  The answer is right in the quote.  He is saying that there is a price difference in one location (on the future's market) and the spot price, which means immediate profits if you have money and ability to simultaneously buy at both locations.  That means that you need an account to be able to do both at once and find some kind of advantage in such a direct and immediate profit(s).

Hey, I used to play around with arbitrage opportunities, and I would be able to do it once or twice, and still feel comfortable, but if I kept trying to make the same arbitrage profitable trade, one of my accounts would get over balanced with either too much fiat or too much BTC.  Yes, I was profitable, but my over balance in one direction or another would make me feel that it was not worth the profits that I was making, and there tended to be a reason that I could engage in such immediate profits, and that was because one of the trades was more liquid than the other and that was the reason that the price was so different that I could recognize an ability to immediately profit in place in which I already had the ability to do so.

So, likely I am getting back to just agreeing with myself and my initial response to you, which was that if you don't know what the fuck fillippone is talking about or you cannot recognize what he is saying, then you do not have enough experience or even know how to access the places for immediate profits.  You don't get to such a place for immediate profits or being able to weigh even if it is worth it for you to exercise such immediate profits unless you get yourself into various places in which you can engage in such trades, understand the basics of tradings and employing the various tools of trading.

You know the expression that defines luck as preparation meeting opportunity?  Well, preparation involves doing your own research and even setting up some systems in your own way of doing things that allows you to take advantage of the various opportunities, and surely with arbitrage opportunities, if they are real easy, they will not tend to last very long, so you already need to be in place, if you were to engage in such.  In other words, arbitrage opportunities move, but someone who is in the game and has prepared, will be able to take advantage of such opportunities, if that is what floats his/her boat.  Does not currently float my boat, because I find myself already rich and getting richer just from holding BTC and NOT playing around with it... so even arbitrage opportunities can include both risks and costs, including time spent and accounting tricks that might
not be worth it once you really weigh the whole situation by getting yourself into positions to understand.

TLDR:  DYOR, YMMV, BTFD, HODL craefully, etc   - hahahahaha.

OK, lets say that I can buy a tv for 100 dollars and also sell it for 110 dollars back to walmart(only) but that transaction would not be settled until a future date. Then that would be an arb on the tv. But lets say i could not goto walmart(for whatever reason)  then I would not be able to actually sell that item would I?

Did that make your conundrum clearer?

wow, this article is really impressive and it gave me a better understanding of Bakkt. I keep seeing people gossip about it but I don't really understand its mechanism.
Bakkt is a futures exchange exchange, one of the very popular derivative tools. but perhaps the bitcoin derivative tool is not really good for bitcoin due to too much manipulation and players are afraid to confront those who have a lot of money. Do you agree with me that is the reason Bakkt failed?

Thank you very much for your link Sir it's very interesting but I wasn't asking for the meaning of arbitrage. I think you didn't understand very well what is the problem here. A strategy has been detailed by Fillippone, to safely earn money with futures. But unfortunately he chose Bakkt for his example and I can't trade on Bakkt like everybody here, so I'm asking which platform I can use to apply this futures strategy. Which exchange are you using to trade futures Sir? Is it possible to apply the strategy on this exchange? Thank you very much

The definition of arbitrage alone gives you your answer so that may be why people are not telling you a step by way step method for doing it. By definition if you cannot use an exchange that you are trying to arb from then you simply cannot use that method. The answer to your question is inherent in your question. And that is why JJG is telling you politly that you have no clue what your doing.

And that is why you have been told to DYOR, luckily for you I am not such a polite guy.

https://en.wikipedia.org/wiki/Arbitrage

I agree that if someone is saying that some arbitrage trade can be done, and if there is instant profits then it should be clarified how that can be accomplished  because sometimes arbitrage opportunities might look easy in theory but much more difficult to carry out in practice

Hello thank you very much for your long reply Sir. I don't want to risk my money that's why I want to apply this strategy. He says it's a totally safe strategy, it's an arbitrage.
I want to do this arbitrage but he doesn't say on which platform we can do it. I can't trade on Bakkt and nobody can trade on it here. It's very frustrating to tell people they can do a big arbitrage and then to not tell where they can do it.