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How To Trade Futures For Beginners | The Basics of Futures Trading [Class 1]

Trading futures and derivatives ...

Futures and derivatives trading to start soon
CONTENT

  • Bitnomial Exchange Opens New Directions for Futures and Options Trading

  • The exchange became the fourth legal player to receive permission from the CFTC

  • Options trading is more profitable than futures trading

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The corresponding decision was published on the official website of the CFTC. Specifically, the document states that “The Commodity Futures Trading Commission has announced that it has issued an order for the appointment of Bitnomial Exchange, LLC, based in Chicago, Illinois, and has granted it designated contract market (DCM) status.”.

Futures and Derivatives Trading ...

Another player in the futures market

 

As explained in the CFTC, designated contract markets are exchanges that can be used to trade futures or options contracts based on all types of commodities and that can provide access to funds for all types of traders, including retail clients. “.

This effectively means that traders from all over the world can trade bitcoin physical delivery futures and derivatives without any hassle. Clients just need to register on the exchange and they can immediately start trading.

Futures and Derivatives Trading ...

At the same time, the Commodity Futures Trading Commission obliged Bitnomial Exchange to comply with all US laws that govern the operation of such sites. This even applies to regulations that will be adopted in the future. The CFTC said in a statement that “the order requires, among other conditions, that Bitnomial Exchange comply with all provisions of the CEA and all requirements in the CFTC rules, which may be changed or adopted that apply to DCM. Bitnomial Exchange must also comply with all statements and representations made by it in support of its application for designation as a contract market. “.

Futures or options: which is more profitable

 

At the beginning of the year, the market saw a rapid increase in open interest in trading bitcoin futures. On the Bakkt exchange alone, this indicator doubled in February. The statistics of the exchange confirm that in early January, open interest was $ 9.6 million, and by mid-February it reached $ 17.8 million. Note that institutional investors also showed interest in futures trading. A report from analyst firm Arcane Research, released in January, proves that more and more such investors are interested in the possibility of using bitcoin in futures contracts. Thus, the report says that the growth of bitcoin futures contracts with physical settlement grew by 1625% over the month. In December 2019, this figure was 13.3 VTS, and in January it reached 230 VTS. Although 230 bitcoins is a negligible amount compared to Bakkt’s daily trading volume, this indicator can serve as evidence of increased investor interest in bitcoin futures.

Nevertheless, Andrey Tonkolitko, the founder of the Crypto Art cryptocurrency fund, is sure that trading options is much more profitable, although the risk is higher here. According to him, with the right approach to strategies and risk management, you can get a profit that exceeds the initial investment by 10, or even more, times.

For example, a couple of months ago, bitcoin cost $ 7,000 and you had the opportunity to buy an option, for example, a call for $ 100-200-300 with expiration at the end of February and a strike of 9000. By the end of February, for example, bitcoin rose to 10,500 dollars and the difference is your net income. Thus, for $ 100-200-300, you buy the opportunity to receive the entire profitability of bitcoin from the strike price (9000) to any price that will be before expiration (end of February 2020). This means that by investing 100-200-300 dollars, you could earn up to 1500 dollars, and this, for a second, 5x-7.5x-15x in 3-4 months, – the expert explained..

According to Tonkolitko, interest in futures and options will only increase, so it is not surprising that today more and more new platforms for trading in futures and derivatives are entering the market..

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All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..

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