Topic: *Unofficial* ICBIT (BTC Futures Trading) - Help & FAQ's (Read 26269 times)

FYI it is no coincidence that Segwitz2 failed and the futures are trading anyway. This keeps the futures unlinked from the cash which is allowing traders to short BTC and go long the futures without causing the futures to rise. This was planned and the big boys will continue to short BTC and go long futures until they have enough. Once this happens we will get Segwitx2. Gotta hand it to them pretty smart going long futures below $500 and selling above 6000-7000.

Hi, I hope I'm right here to ask my question..

I'm new to futures, but read this " ICBIT Futures for Dummies". It sounds to good to be true, so I want to know, where I missunderstood something.

I talk about the "Example 3: Keep your Values" at page 22 of this guide.
You can compare it with arbitrage. Just buy bitcoins at an exchange at 500$/BTC and sell them on icbit for 800$/BTC. Why not just doing this with all your money again and again? It would be riskfree profit.
So what I missunderstand here? Why is this not possible? If it would be possible, everyone would do this and therefore if the bitcoinprice is 500$, nobody would buy a contract with 800$/BTC, because all the people would offer a price like 505$/btc regardless of the month (just to make a bit arbitrage profit).

The only problem I see, is that when you sell one bitcoin at icbit at a higher price, you will get your bitcoins not until the date of your contract is reached. So this is a limitation.

Hahaha sounds like something I need to read then. Thanks!

Partial execution is fully supported. Minimum quantity to buy or sell is 1 contract (= $10).

Also, there is a nice trading guide called ICBIT Futures for Dummies written by my friend at Bitsurant. Check it out.

Thanks for this, I just now read it and I've finally wrapped my head around it a little better. Made myself a spreadsheet in excel that helped me visualize it all.

A few more questions:

This is probably really stupid but I would rather know for sure than not. So the orderbook displays currently open orders, so "Buy" orders listed there are open buy's from other users, to whom I could sell contracts? Or do I have it backwards.

Also, so given that a Buy order is listed there, ex. 250 contracts with a price of 660. Given that I understand my above question correctly and that is in fact an order I can sell to, would I have to sell 250 contracts at 660 to match up with that one? Or if I only sold 150, would it execute for me and only partially execute the other users order, leaving him or her with an open order of 100 contracts at 660?

Thanks in advance guys!

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Couldnt you use your btc long position to sell future contracts?  Say sell the Dec 14 contracts now at $726.     the premium is?
[/quote]

Yes of course, and many do.

Couldnt you use your btc long position to sell future contracts?  Say sell the Dec 14 contracts now at $726.     the premium is?

Until the UI is improved more significantly, I added units to some confusing places. Please check it out.

Yes. The pricing need to be cleared up.

Also standardized it would help. For instance, 1 unit == 1 bitcoin rather than 10% of it.

I want to do arbitrage with this website, but the pricing structure needs to be cleaned up.

First, everything should keep the same unit, or at least have a display that is in the same unit. Or, at the very least, the units should be identified.

Here is an example trade in the UI:
Quantity: 59 (59 what? Bitcoin? Dollars? No, it's 59 sets of $10)
Price: 590 (So here we're using units of $1, rather than the $10 used in the above item)
Margin to buy: .2827 (.2827 what? Dollars? Units of $10? No, it appears to be .2827 BTC)

Each of those three items are in different units. There is no reason for this whatsoever. The lack of units on the UI is inexplicable when the pricing mechanism is this over-complicated already.
For all the user can tell, the margin is NOT .2827 bitcoin, but rather $0.2827 per $10 contract, because those are the units that have already been used in the UI.

Yes, Super T's explanation is right.

Each contract is for $10 (that's how it works if we want to account contracts in bitcoins). When you deposit your bitcoins to ICBIT you just move your long position in bitcoins to our site. Now, you can use this money to either increase your long position by buying contracts - effectively this means you're opening a short position in US Dollar (dollar falls - you get more bitcoins). Or, you can "sell" your long position and move your funds into "virtual dollars" (which are same contracts, if you sell them) and buy them back when the BTC price falls.

When you sell 1 contract, you are not selling 1 BTC, you are selling $10 of BTC (at the price specified).

So if you want to create a position equivalent to -1 BTC, and the current trading price is 700, you need to sell 70 contracts (70 x 10 = 700, give or take a little for fees etc).

You then have a floating position of $700 worth of bitcoin, against which you will accumulate profit or loss, if the price halves and $700 buys twice as much bitcoin at expiry, then you will pocket the difference (in bitcoin).

You will see yet net value of your position fluctuate on a daily basis as the ICBIT price for that instrument fluctuates. If you hold to contract expiry you will see the ICBIT price converge with the settlement spot price (e.g. Bitstamp) in the weeks/days before settlement.

Make sense? If not the best way to learn is just buy sell 1 or 2 contracts and see what happens, you'll soon get a feel for it.

I'm trying to wrap my head around how the $10 chunks work and how the futures execute... Probably a noob question but I'm lost and can't seem to figure it out no matter how much reading I do.

So say I'm selling a contract for 1BTC for $700, instrument 6.14. So if I'm correct, on June 14, 2014, the buyer of my contract will not pay me USD (since everything is in BTC), but in BTC. Correct?

Now, here is where I am lost. On the settlement date, with a normal future, I would turn over 1BTC in exchange for $700USD, even if the value of 1BTC is now only $600. In this scenario, the buyer has lost $100, in the form of overpaying for 1BTC. But since all contracts are settled in BTC on ICBIT, would the buyer pay me in $700 worth of BTC, at current market value? In my proposed scenario, ~1.166BTC?

On the flipside, if the market value of 1BTC goes up to $800, what happens? Do I still deliver 1BTC in exchange for only $700 worth of BTC, in this case ~0.875BTC?

How do the chunks play a role? The whole setup is confusing me and I really would like to understand so I can trade BTC futures.

In ICBIT trading platform the market is freely accessible to anyone. So anyone can issue orders and make the spread tighter, or consume orders and make the spread larger (as much as arbitragers allow it to).

So yes, we do not take a percent of your profit or loss, instead we take fixed value for a transaction. This is de-facto standard in any futures contracts market.

Haven't looked into it 100%.  But normally option contracts are 100 units per 1 contract. I could imagine if you bought and had to sell or vice versa before expiration or on that day those dollars add up because most dont want to or have the actual funds to fulfill the contract settlement in actual btc.

But I don't think they make money on the spread. That's just the consequence of a thin order book isn't it?

It has to be the spread.

For ICBIT

5.14                   528       526            532          If you bought the contract at 532 and current value was 528 you are behind $4.  If you wanted to sell it price is 526 for 528 last sale.

6.14 contract at $540  Bid 520 and ask 554


I trade equity options at TD and OH.  At Optionshouse is $8.50 plus .15 contract which is one of the lowest rates.

So for any future position, irrespective of size and duration, the only fee I pay you is a few cents to open and close the contract. That seems too good to be true 

Hello,
we don't have any instruments which incur the overnight holding fee now.

As for the trading fee - it's fixed, per 1 contract per 1 operation.

For example, you buy 5 May contracts at $500, and then sell all of them at $600 (let's be optimistic :-)).
Then you would be debited 0.0005 BTC after you bought the contracts (0.0001 BTC trading fee * 5 contracts). Then when you sell them, you would get 0.0167 BTC of profit credited to your account and again 0.0005 BTC debited for the sell transaction.

Please don't hesitate to ask more questions!

I dont know. It is very vauge.

Im sure they have to make money somehow either by trading fees or making a spread.

I wanted to trade weekly options before but they are only have monthly.

Thanks. It is still all a bit obscure. Do you know if the holding fee is different to the opening/closing fee? And how much is it?

Then they say there is a twice a day holding fee:

FEES

Each trading instrument will operate one of two fee models:
Lower transaction fees, but a twice-daily holding fee per contract applied at clearing (designed to encourage day-trading)
Higher per-transaction fees, but no holding fees (designed to support longer term trades)

Per transaction fees are calculated in BTC and are chargeable at the point of contract purchase/sale, therefore each position will incur fees twice (open and close).  Fees are charged according to the quantity of contracts being bought/sold, so whilst the fee is not displayed prior to purchase, it can be calculated by multiplying the quantity by the fee (and double if you also need to consider closure fees).

Actual fees are listed on the instrument reference pages (e.g. https://icbit.se/BUH4) and vary per instrument, usually with lower fees on contracts which are furthest form settlement.

Update 01/04/13: Fee discounts based on trade volume - fee discounts are now applied based on trading volumes, so if you trade a lot your fees will be lower - as outlined here: https://bitcointalksearch.org/topic/m.1717445

I have a question about fees.

ICBIT say this regarding the BTC/USD-9.14 contract:

"0.0002 BTC for 1 contract trade or settlement. Subject to change."

Does this mean the only fees I ever pay to ICBIT are 0.0002 BTC (about 10 cents) when I open a trade and the same when I close it?

Stop hunting is completely endemic in the forex world. It must be expected here too. The only thing to do is walk away from all trading until transparency is achieved - producing the trade ticket receipt from a straight-through broker.

More motive for Bitcoin enforced contracts and decentralised exchange. People are broken so we are replacing them with robots.

There are XBT/USD contracts for each of the following months:

Feb, 2014 (Settlement Feb 21st)
Mar, 2014 (Settlement March 14th)
Apr, 2014 (Settlement Apr 18th)
Sep, 2014 (Settlement Sep 19th)

There will likely be additional contracts added for one or more month(s) between now and September.

Nearer term contracts don't usually see much volume.

The option contracts are only quarterly now?  How about monthly or weekly?

I have a question... how can i just get a 10:1 margin or something, and buy bitcoins at market price?

Also, how does futures contract work here?  I am very confused about this site.

-Response from fireball?

There's nothing new in this world, except for the history you don't know. Bitfinex is certainly a scam, which is what you'd expect out of people using stolen code to implement a bucket shop.

Here is the annoying part.

If icbit were legit it would be beyond successful. I had just got a few friends into bitcoin and told them to open accounts at icbit and another exchange when I had to tell them to steer clear of icbit. Just these people I almost brought would have added a lot of depth. So they make a few bucks being crooked. If they just ran things straight they would make a fortune. It makes no sense.

Your exchange seems to be run right, at least not a scam, but 30 btc to get in leaves most people, including me, out.

Bitfinex has been first rate so far. Obviously not high on your list but I have seen no major problems there.

That part is easy to explain. Let's quote here:


People don't want to admit they're idiots and people don't want to admit they're scammers. People can't live with the fact that they have no skills and can't in any way be useful or add anything of any value or import. People prefer to believe that wanting to is quite enough. They like to pretend that they too can do things.

Usagi thinks he's creating value. Eskimo Bob imagines he adds commentary. This schmuck here thinks he's sufficiently qualified to even mention MP by name. This other fuckwit thinks he's running a service rather than a circus. The btcjam retard imagines -20% average returns is a lending operation, adding value or whatnot. Kludge the lifetime clerk (currently unemployed) thinks he's a banker. The coinurl muppets think that, and to quote,


There's a horde of these muppets, and they just keep right on talking to each other as if they're people or human beings or something. Basically this here is the kindergarten, and so in this magical space Santa does indeed exist, and Superman can solve any and all problems (which don't exist anyway) and so on. It's called forum expertise and forum investors and so forth for a reason after all.

The question you pose on that thread under the guise of paraphrasing my comment is very dishonest.

I'm sorry to see the level of ethics of people who have 'power' in the bitcoin world.

Post whatever conversations you like wherever you want. If  I notice something I feel needs a response I will respond.

xxxxxxxxxxxxxxx

Have to add this comment I noticed from you Stephen.

https://bitcointalksearch.org/topic/m.1450792

You and Fireball and others who may be clones of you do not notice the dots on the path traced to closing spot. Do you know what those dots are, e.g. 1m 6m 1y on your diagram? Do you know how they relate to the word you and Fireball use again and again and again? You do not know what the word means. Please provide a hundred links to whatever investopedia you like. You do not know what the word means. Fireball does not know what the word means.

This is theater of the posers.

I beg any of you pretenders to please find out what the words arbitrage, backwardation and contango mean, and what they do not mean. They are not magic words that you can just toss out to throw a smokescreen when you don't know something.

"Why is price x lower than price y"
"Oh, it is backwardation"
"Ah, I see. It's clear now."

"Why did a December contract move against spot by $10?"
"Well its arbitrage. Maybe you don't have the knowledge to understand it".
"Oh yes. I see. Arbitrage it is, okay"

A whole bunch of people that sound like teenagers pretending to be experts. And how they got this far without their bluffs, their fraud, being called, who knows?

Please, anyone who might be thinking of investing with this group please read all the posts and ask someone who knows about markets before you deal with them. Be careful of this group.

Again, this is a Help & FAQ and not the place for a discussion on your topic.  I'll no longer be posting here in response to your assertions.  I have continued the conversation here though:
 - https://bitcointalksearch.org/topic/m.2703939

You are playing the same game they play of trying to make it look like the deficiency is in the trader rather than the exchange. 

Your childish comments about FDIC say a lot about you. I have no problem with risk. On icbit it is not risk, it is outright scamming, cheating.

Any person considering investing there, I urge to simply look at all the posts regarding the site. There is no way to make money on an exchange when you are holding positions that compete with people who can create unlimited contracts and who can see the details of your positions, including available bitcoin.

Anyone who defends those kind of crooked practices is the same as the scammer./

OK, at this very moment the last trade at BUZ2 (occurred a few minutes ago) shows 85.  Mt Gox has plenty of bids above, ... and currently trades about 88.

It doesn't matter if that fits anyone's definition of "backwardation", ... it is a condition that can happen, with or without manipulation.

Now until you say that icbit refused to enter an order of yours, or that a deposit you made wasn't credited to you account, then iCBIT is a functional marketplace that is subject to market forces.  Your positions are at a higher risk if you use leverage.  If market forces cause extreme backwardation then that's the nature of the beast.      There's nothing to counter manipulation other than market forces.

Perhaps, akwfleaspirit, ICBIT isn't the right place for you.  Perhaps a nice FDIC insured CD at your local bank is a more secure place for you to speculate with your funds.  [Edit: Actually, that might be something that should be bolded and in red at the top of the OP for this thread.  "This service causes traders to be vulnerable to manipulation by other traders.  If you don't understand the risks  don't trade here.".]

Stephen the words are not used in the way a genuine trader would use them.

It's like if you stand outside a doctor's office and one person goes in with a broken leg and the doctor says "you seem to be suffering from an inexorable indisposition". Most people would say "Well, you're a doctor, that sounds about right".
Then another person walks in with a toothache and the doctor says "you seem to be suffering from an inexorable indisposition". Most people again would say "You are the expert. It sounds right".

This is again and again and again on the icbit site with the same three words. It just is not normal. A person will say "I am such and such from this or that place and I noticed the contango" and another person will say "Oh yes, well I am from x and I noticed it too" when any simple idiot can just look at the orders and see what happened. It's beyond silly. It's like when you are a small child in kindergarten and someone starts some word game that makes no sense to someone who knows the words.

So okay, in a very strict sense, in the example above, an alternate use of the word backwardation sort of applies. I say "sort of" because even that alternate use would apply normally to a contract that trades near spot. To use backwardation to describe a heavily margined bitcoin future that has been manipulated is a stretch. The word is meant to describe a market condition, not an act. A trader would not use the word the way Fireball did above and the vast majority of the time those three words are used on icbit it would make a person scratch their head.

icbit has potential if it is run as an honest exchange. That is a big change from how it is now. I was cheated in a way any honest person with trading experience would see. I don't know Fireball or any of the other characters on icbit or this board but I am willing to extend the benefit of the doubt that maybe Fireball is a younger person who does not know what is good and what is bad. If that is the case, if he is scamming simply because he does not know the difference between an exchange and a scam operation then he can return half the bitcoin he got from me and I will point out some things he is unaware of that tag him a scam.

Backwardation

"it may also refer to the situation where a futures contract price is merely lower than the current spot price."
 - http://en.wikipedia.org/wiki/Normal_backwardation#Normal_backwardation_vs._backwardation

I have to get one more word in about something that annoys me endlessly.

Fireball you own a futures exchange. Why not take the time to go online and look up the words arbitrage, backwardation, and contango? You and a bunch of people on your site use these words constantly but you are using them in a way that shows you do not know what they mean.

Just google the words and spend a few minutes learning what they mean.

I apologize if my comment is not help and faqs.

Sorry. Stephen I lost most of the money I have because I was slow to realize what was going on. Fireball claims he is trying to create an honest exchange. I am offering constructive feedback rather than simply exposing the current problems, in exchange for half of what they got from me.

icbit could be made into an honest exchange with protections against manipulation and in house trades. If Fireball wants to make things right I'll give feedback to help.

As far as I'm concerned that falls in the realm of "Help & FAQ". I'm sorry if it doesn't.

Please, akwfleaspirit, this is a "Help & FAQ" thread.

You have started a thread in the proper board (Service Discussion). That's where these types of comments belong.
 - https://bitcointalksearch.org/topic/icbit-warning-246845

If you are trying to run an honest exchange then revise each of the practices mentioned and refund half of the 20 or so bitcoin I lost to you. I'll accept the other half as an honest loss for being long in a down market.

1HKLdZScnA6ooRBqPrJbZnf5o8sCMr5H42

All of the comments made already stand and won't be removed but if you make your site right and stop the cheating games my comments will reflect that.

One of the problems with this argument is that there appears to be several online personas that are all the same person, posting on behalf of icbit. I posted a link on the icbit chat while there were a few people on site. There was only one hit on my server but there were indications that several people had seen the post. It looks like one person is pretending to be several people that each support icbit.

Should I open 6 different user ids to post my opinions and pretend to be 6 different people? It's stupid.

Well, I won't speak for anyone else, but don't take Popescu seriously.

I think (disclaimer: I have no direct evidence that was him, as he was working through "his broker" usually), the ICBIT hatred appeared after "he" sold short a big amount of futures at our exchange, but the spot rate started sky rocketing. Instead of limiting "his" loss, accounts presumably controlled by him started selling more and more, creating huge backwardation of futures price vs spot price. Eventually, money on those accounts ran out, and they were forcefully liquidated against the market.
Incidentally, shortly after that, MPOE-PR invaded our forum threads, and posted those accusations on his blog website.

Maybe when done with the astroturfing move on to addressing stuff.

I am not especially articulate and have deficits that may make my explanations unclear. For a more intelligible explanation of part of the icbit scam see http://polimedia.us/trilema/2012/icbitse-the-bucket-shop/

You have a very sophisticated con running.

A few points.

1) Trading by icbit which makes use of their knowledge of client accounts.
2) Procedures which make no sense except as part of a scan, e.g. clearing at last single trade price.
3) Use of several online personas by one single person on icbit chat.

icbit is a scam. Some people will make money on it, as with most scams.

Thank you, yes, that is right. There were a lot of scammers in the Bitcoin world, so I understand people jumping into conclusion very fast, however we are constantly improving ICBIT to add transparency, to stick to the rules, etc.
I still stand on the words - it is a once in a lifetime opportunity, and I am not interested in robbing people for a few hundreds BTCs when this thing could grow into a multimillion US dollars venture. That's the goal I wish to achieve, and our team is putting all efforts to make that happen.

qxzn - If you file a support request via official email it's going to be investigated much faster.

My BTC withdrawals keep being rejected with "not enough funds". Yet I have more than I am requesting in my "available" balance. Any ideas?

I have to say, I don't think your views are particularly well thought out, or widely held.

I have used ICBIT for some time and whilst the platform has obvious problems (such as the ability to weald a disproportionate influence over the clearing range adjustment), I have not been scammed, and in general my profits/losses have correlated with the trend in underlying price movement.

I have read your accusation thread linked to above, and your assumptions about what the 'normal' futures premium for BTC should be are simply wrong.  Sure the contango/premium reached 150 USD in March when BTC appeared to be running away like an unstoppable train and all the dinner menus read bear soup, but Fireball has made no secret about the fact he was unhappy with that situation and the risk it posed to his platform due the way counterparty loss is managed (the validity of which was demonstrated during the ugly counterparty contract liquidations which occurred during the subsequent March crash).  It was also no secret that Fireball has been publically reaching out for market makers, citing the large arbitration opportunities available as an incentive.  Combined with the recent slide in BTC which has deterred many bulls from making further long investments it is not at all surprising that contango has significantly retracted and in some cases we have seen backwardation.

I also think it is reasonable that if you no longer meet the margin requirement for a position, then your position should be liquidated.  If that means listing your assets for sale at an attractive price then so be it, ICBIT do not close out your long position by buying your assets from you (right or wrong, this is their stated business model) they are listed for sale to other platform users, and If there are no corresponding bids/asks to cancel out against I would expect them to be priced to reflect the need for a quick sale in order to preserve the risk of loss to others.  As a trader exposed to the risk that your losses may affect my profit, I EXPECT this safeguard.

ICBIT is a small platform and certainly high volume traders can heavily influence the market prices, but this is life, you will find the same situation within any tradeable asset market.  The way you have simply jumped to the conclusion that losses = conspiracy = ICBIT are out to rob us all (and then started throwing public accusations around) is not cool.

I could be wrong and Fireball may have some scheme in action designed to relieve you of your assets, but I don't believe this is the case, he once described the ICBIT venture to me as a once in a lifetime opportunity, and I believe this is how he sees it, as something he cares about and wants to see succeed.

"Contango" and "backwardation" are real words, and they are used constantly on the icbit site, along with "arbitrage" to explain any unusual price move, but those words are a smokescreen and the actual meanings have nothing to do with the price moves.

icbit is running a complex scam that has stolen a lot of bitcoin from naive traders. Already three people have posted on the scam and more will be following.

The rats that steal bitcoin from small players need to be exposed and cursed.

Another trader, who says "September has to be above $100 even if spot is $30 lower". Sorry guys, you have to be cautious. Contango and backwardation are normal, and you have to take additional care when trading with leverage.

Trading with leverage provides the ability to get higher profit, however it also means that your loss may be higher.

Newminer was telling the truth. Be cautious about icbit.
https://bitcointalksearch.org/topic/icbit-warning-246845

Is there a way to programmatically download a history of all my trades?

newminer spammed all ICBIT threads. His concern are address in the official english and russian threads.

admin! I'm in shock! why I closed the 50 futures on 140?? (At that time, as Bitcoin was worth 85)
I am engaged in arbitration, AND SO THE FUTURES FOR ALL I HAVE BOUGHT Bitcoins

a month ago also closed several hundred at the rate of twice the rate at Gokcen. I swallowed a pill that, although the loss was enormous
I'm arbitration, and under all the futures I bought bitcoins.
I see the clearing in 8utra occurred at the rate of 130.49. HOW my futures then could close at a higher rate?
the more that ever were willing to buy, so I understand it, you are required to change more quickly before my partner, closing futures to someone who did not have enough collateral
Why is the second time I have to myself to bear huge losses (in percentage terms), while the administration admitted mistakes (not relevant market situation margin requirement GO untimely margin call)
Please answer, because if such losses occur without sharp collapse (in contrast to the situation in the past month), then the arbitration between Gokcen and this exchange does not really.
before that, when on April 12, I closed the 200fyuchersov to 143 when Bitcoin was 80, I swallowed it, though, and lost a lot of nested, the more that a month before, I was on these futures suffered loss (here), and constantly added here Bitcoins
But many of those futures, I was selling more on 55, 70, 90. And forcibly bought at 143! (
but I understand that at that time there was a sharp decline, and many have suffered from the fact that at the time were not increased margin requirements
but on the basis of what is now closed my contracts, the relatively quiet market, always with a willing to buy contracts at a reasonable price, and the more that the price is above the clearing price!
I want my money! This is an obvious miscalculation ADMINISTRATION AND I SHOULD NOT BECAUSE THEY SUFFER IN WHICH THE TIMES

Cool thanks - updated.

Also added requirement for a damn order summary before final submission!

Already moved today.

Unscheduled clearing is being tracked as hot issue #1!

@ Fireball - are you able to confirm the planned deployment date for the move to twice daily clearing and the associated guarantee against unscheduled clearing?

This is patently false. The trading range SHOULD provide safety to the trader, but on multiple occasions the admin of the site has performed a 'manual clearing' that reset the prices so that trading could drop far below the 10% maximum in 24 hours. This happened due to market manipulation that drove the price down to 75 briefly from 94 (similar to what happened a couple days ago). The spot price quickly returned to normal, but the admin removed the trading range protection, and caused loss of many positions and forced margin selling on lot of traders. This has resulted in a great loss to many traders, who are still trying to get the admin to repay at least the considerable amount of fees that went into opening these positions that were unfairly closed.

This all happened BEFORE the admin added the arbitrary manual clearing clause to the futures description.

Adding requirement - "margin" field within "your orders" view (esp. useful against unfilled orders).

Thanks Stephen - yes 100% unofficial - I have amended the title.

Also - I have amended the settlement specifics to incorporate the text you provided, thanks for the clarification.

Any features you would like to see on the platform?

Here's one - the way I see it, liquidity is a problem, also the contango arbitrage opportunities are very often HUGE on the futures instrument range.  If we could somehow make the arbitrage process more accessible, I bet we could vastly improve liquidity.  There could be opportunities to do this via both the UI and the API...

You might want to inject an "Unofficial" in the title or somewhere to clarify that ICBIT did not author this.




Because that could be misinterpreted, each contract type specifies the method that determines the settlement value .  For BTC/USD contracts, the final settlement value is the 24 hour volume weighted average price (VWAP) from the largest exchange at the time of the settlement (i.e., 20:00 UTC).

This thread is intended to support and mutually benefit the ICBIT user community, I'll try (edit: failing miserably) to keep up to date as poss - corrections or additional info/clarifications welcome.

UPDATE - 19/07/2014 - semi-official training guide available.


INTRODUCTION TO ICBIT FUTURES TRADING

https://icbit.se/

You want to hedge, arbitrage, or simply open a leveraged position against BTC price changes.  ICBIT offers leveraged trades through "futures" contracts, which are exchanged as a quantity of units between buyers and sellers.

Update: there is now an official rules page: https://icbit.se/rules

CONTRACT VALUE

https://icbit.se/BUH4 (example contract spec)

Each contract unit represents $10 worth of BTC at the specified price in $, so:

   > 1 unit at a trade price of $100 represents $10 worth of BTC, or 0.1 BTC in contract value.
   > 100 units at a trade price of $100 represents $1000 worth of BTC, or 10BTC in contract value.

The current trade value of each open futures instrument is not pegged to the underlying spot price, but is instead based on speculation as to what the final settlement value will be.  For this reason it is not guaranteed/expected to rise and fall as the spot price does.  Final settlement value is determined on listed the day of settlement for each instrument (currently 14th Apr, 14th Jun and 16th Sep), and the final settlement value is the 24 hour volume weighted average price (VWAP) from the largest exchange at the time of the settlement (i.e. 20:00 UTC).


OPENING A POSITION

Use the Buy/Sell buttons if you want to place an order with specific price conditions, if no corresponding offers exist at the specified price, then the order will enter the order book and become visible to others as an active bid/ask, if another user places an order which meets the specified price, the order will be filled and contract positions activated.

Use the Buy/Sell at Market button if you simply want to purchase at the most favorable currently available price.

To open a position, the following key fields must be populated.

• Quantity  = The number of $10 chunks of Bitcoin you want to bet on.
• Price       = The price you are prepared to buy/sell at.
• Amount   = Calculated field displaying the amount of underlying BTC you are effectively betting on (Quantity * 10 / Price).
• Margin    = Calculated field displaying the amount in BTC which must be "reserved" in the account to cover any potential loss incurred against the position (15% I believe).

CLEARING

The nature of the contracts is such that ongoing profit or loss against open contracts is re-distributed twice a day (08:00 and 20:00 UTC / GMT) in a system wide clearing process (rather than only being realised when a position is closed).

During Clearing all contract positions are evaluated and the latest trade price is used to determine the relative gain loss between the buyer and seller of each open contract. This difference (variance) is then transferred from the loser to the gainer, the contract remains active and will be re-evaluated at the next clearing session.

So if trade prices increase from 100 to 110, then the variance will be ((100*10)/100)-(100*10/110) = 10 - 9.09 = 0.91.  
     > Prior to clearing, the sellers account would show an unrealised loss of 0.91BTC, and the buyer +0.91BTC.
     > At clearing the loss of 0.91 would be deducted from the sellers account, and credited to the buyers account.  
     > After clearing:
               > "Unrealised P/L" balance reverts to 0 for both buyer and seller.
               > "Execution Price" for the open position is reset to the trade price upon which the variance adjustment was made.
               > "Margin" will also be adjusted (again, not sure of the precise margin calculation).

So, open a position of 100 units at around $100 and sell after a rise/fall of say 10 bucks, you are looking at just under 1BTC profit/loss (excluding fees).


RANGE

Another feature of the contract format is the use of trading range controls, an upper and lower limit on each instrument beyond which trading cannot occur within the current (12hr) session.  The range for the session is set during clearing based on the variable weighted average price (VWAP) price plus or minus 10% (edit: some newer instruments have wider range boundaries), so if the last trade price was 100 at clearing, the range for the following session will be set to 90 - 110.

Range boundaries are a safety feature to protect market participants from exceptional price swings in the underlying spot market, and limits risk exposure to traders (e.g. during intraday spikes/dips), given Bitcoin price volatility it is not unusual to see prices reaching upper/lower range limits, resulting at times in cessation of trade as no-one is prepared to buy/sell within session range threshold.

FEES

Each trading instrument will operate one of two fee models:

• Lower transaction fees, but a twice-daily holding fee per contract applied at clearing (designed to encourage day-trading)
• Higher per-transaction fees, but no holding fees (designed to support longer term trades)

Per transaction fees are calculated in BTC and are chargeable at the point of contract purchase/sale, therefore each position will incur fees twice (open and close).  Fees are charged according to the quantity of contracts being bought/sold, so whilst the fee is not displayed prior to purchase, it can be calculated by multiplying the quantity by the fee (and double if you also need to consider closure fees).

Actual fees are listed on the instrument reference pages (e.g. https://icbit.se/BUH4) and vary per instrument, usually with lower fees on contracts which are furthest form settlement.

Update 01/04/13: Fee discounts based on trade volume - fee discounts are now applied based on trading volumes, so if you trade a lot your fees will be lower - as outlined here: https://bitcointalksearch.org/topic/m.1717445

MARGIN CALLS AND FORCED LIQUIDATION

https://icbit.se/margincall

Already spelled out pretty well on the ICBIT site, but many people still ask this, so here is the text:

"Every user's balance is continually checked by the trading engine if that user has any open positions. Margin call (forced close) is issued when his balance (actual money in the account plus total variation margin) is less than or equal to 75% of the total maintenance (initial) margin necessary to keep the positions.

If there are no respective bids/asks in the order book, the worst case scenario begins. The trading engine will go through users holding counter positions and forcibly close them by such a price that the user's balance who has the loss never goes negative."

API

https://icbit.se/api

There is an API available which offers full access to order book info, as well as order execution capabilities.  Personally I think the specs page could be improved through the inclusion of some additional specific worked examples, as well as instructions for the configuration of a very simple user control interface (excel/vba would be a start)... submissions welcome!

edit: example code here http://captainbodgit.blogspot.co.uk/2013/04/exploring-icbit-bitcoin-exchange-api.html


BUGS, HOT ISSUES

[NOW CLOSED] 1. Unscheduled clearing.
There is currently some controversy surrounding the use of unscheduled clearing sessions.  These appear to be run as exceptional events when large variations in BTC/USD spot price occur, and form part of a risk management strategy used to limit ICBIT's potential exposure to loss where over-leveraged contract losses can exceed the available account balances before any forced position closure has occurred.

There have been several instances of unscheduled clearing resulting in trading range increase/reduction, and subsequent forced closure of positions resulting in trading losses to individuals, prompting heated discussion of the legitimacy of such clearing.

Solution agreed and implemented (10/04/13): Fireball has confirmed ICBIT will now operate two daily clearing sessions, 20:00 and 08:00 UTC, and ad-hoc clearing sessions should no longer take place.

[NOW CLOSED] 2. Range Manipulation during the clearing process.

Each day during clearing the trading range for the following session is adjusted for each instrument, previously the adjustment is based on the price of the last single trade prior to clearing.  As a result, there were frequent attempts to influence the adjustment by shooting low/high orders in at the last second before clearing.  Range adjustment manipulation is attempted as a means of limiting losses and maximising the potential for profit during the following trading session, it can also result in forced closure of otherwise profitable trading positions, and has resulted in much heated discussion.

Solution implemented (December 2013): Range and variance adjustment calculations during clearing are now based on a new Volume Weighted Average Price, which should resolve the problem.
Target Fix Date: TBC

3. Forced closure of "winning" contract positions.  

Because ICBIT does not assume the counterparty risk for futures contracts being traded, gains must come directly from counterparty contract holders.  So if you buy a contract, and BTC rises, your profit must come from the loss of a corresponding seller.  In extreme market scenarios, those on the negative side of a contract will decide not to replenish a heavily depleted margin (and are perfectly entitled to do so).  Under normal conditions such contracts will then be forced back onto the market and transferred to a new seller at the best offered market price, however in the event that no other sellers exist, there is no way to continue maintain the contract obligation to pay profit to the gaining party, so contracts are force-closed at the "optimal" price (which essentially means the best possible price for the "gaining" side).

Because market price gaps can cause a contract loss to exceed both available margin, and the entire available account balance (if low enough), it is possible that already "realised" profit against an open contract can be reversed at the point of closure.