Starik you are correct on some points, but please first start with point number one. Why is last single trade used to clear? It is used to manipulate the market and scam people. That is clear if you look at the screenshots. Why is it used? It has no reason other than to scam, you can see it is being used to scam.
Aside from that I'll try to answer your points, some of which are good.
In an honest market it cannot.
Tell me why on honest market just as i write this S&P500 is 1,615.41 and E-mini S&P 500 Futures Jun 2014 is 1597.75?
So it surely can and all your arguments is bs
You are partially correct.
S&P 500 Futures Jun 2014 is 1597.75 yes
S&P500 is 1,615.41 yes
But,
1) If you look at the charts for spm14 and s&p500 for any period of time, one month, one year, whatever, the prices track. There is clearly a relationship between s&p500 and spm14.
2) s&p500 does not have the volatility bitcoin has, not even 1% of it. So the forward price reflects less of volatility than of the simple cost of carrying the contract.
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True.
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If you add something of value to it, a five dollar bill [the time value] then the two things together cannot sell for less than one dollar.
And if you substract some "time value"?
BTW, why are you not answering my questions? In is not funny to talk to a person, who only says "bla-bla-bla" and not answering straight questions
With bitcoin futures the biggest part of the value in futures would be volatility. If you have one bitcoin it is worth x. The right to buy a bitcoin at price x at a time in the future cannot be less than x.
If you have something worth $1 and you put it in a box with something else. The combined box with two things cannot sell for less than a dollar, because one of the two things is a dollar.
Your point with s&p is partially valid except s&p does not have anything else, it does not have equivalent volatility. If you put s&p500 futures in a box the box is basically worth the same as s&p500 except a small adjustment for financial costs and adjustments if it is considered overbought or oversold.
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If you want to clarify this for yourself do the following calculation. Using initial margin requirements used at their website look at what happens if you buy 1000 September contracts today and then estimate the price of those contracts if bitcoin moved a few dollars up. If you want me to explain that further or you are not comfortable with math say so.
Please you do this calculation if bitcoin moved 20 dollars down
1) A person has to look at the manipulation of prices first to understand that profits or losses are not based on the price of bitcoin moving, but rather on the manipulated movements of the contract price. According to the movement of bitcoin you could have a fine position but it does not matter because the contract price will be manipulated to clear your account.
But anyway.
The following are the three contracts offered now. Each $20 down and up, 100 contracts.
Month of contract ** initial margin ** price at which 100 contracts are available
Dec 100 contracts 2.521 85
100@85 11.7647
100@65 15.3846 profit or loss 3.6199
100@105 9.5238 profit or loss 2.2409
Month of contract ** initial margin ** price at which 100 contracts are available
Sept 100 contracts 4.7545 90
100@90 11.1111
100@70 14.2857 profit or loss 3.1746
100@110 9.0909 profit or loss 2.0202
Month of contract ** initial margin ** price at which 100 contracts are available
July 100 contracts 2.588 92
100@92 10.8696
100@72 13.8888 profit or loss 3.0192
100@112 8.9285 profit or loss 1.9411
So, For a $20 movement the best profit, 3.6199, at the cheapest initial margin, 2.521, is on the farthest out contracts, December.
If you look at the prices of contracts on icbit over time, I can guarantee that these strange prices are intended only to catch suckers who believe they have found a way to capitalize on a bull market.
They are not honest prices in an honest market.
Look at some of the screenshots of prices from a few weeks ago.
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Derivatives like this have existed for many decades. If you want the formula for this type of contract try Googling "valuing volatility in futures markets"
Again no answer.
Looks like you simply post some random numbers that bumped into your head.
I ask you to post here the formula and all your calculations that gave you those numbers.
Volatility can be measured, it has a value. A serious person does not ignore it. The fact that sometimes it is reflected in prices at icbit, then it is not, is a warning signs the prices of contracts on icbit are being heavily manipulated.
In any kind of leveraged contract volatility has to be accounted for. Imagine if you could buy a thousand bitcoin at spot using an exaggerated leverage of 1 to 1000. So you could put down one bitcoin and control one thousand. If the price went down .001 btc you would lose but if it went up one bitcoin your 1 would be worth a thousand. It is a no lose. Just keep doing it and 50% of the time you will get 1.000 to 1 payoff. When you see that you are seeing a scam. That example exaggerates a bit of course but anything that is leveraged must account for volatility.
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We'll see.
What i see is bitcoin below 80$
Yes. It goes up sometimes, other times it goes down.
If a person wants to speculate, whether long or short, they should go to an honest exchange like bitfinex or some others. ICBIT is running a scam. There is plenty of evidence. If you like, invest there.
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