One of the most discussed topics in the financial world recently has been bitcoin and the technology behind bitcoin. A few weeks ago Cboe Global Markets announced plans to launch futures contracts based on bitcoin prices and that process is undergoing regulatory review. However, we do have the potential contract specifications available. For those who want to get prepared for the launch of Cboe Bitcoin Futures here are some highlights.
The underlying ticker will be XBT and the ticker to see the contract settlement values is XBTS. The contract multiplier will be 1 so if a contract is trading at parity with bitcoin it will be worth about $7900 based on current pricing. The minimum tick for a directional, non-spread trade is 10 points or $10. A spread trade will have a much smaller tick of 0.01 bitcoin or $0.01.
Several expirations may be listed. Standard, or monthly, contracts may be listed to expire for three continuous months and farther out for months on the March expiration cycle (Mar, Jun, Sep, Dec). There may also be up to four serial weekly expirations. Standard contracts will expire on the 2nd business day before the third Friday of the month which typically will be a Wednesday.
Trading hours run from Sunday night at 5:00 pm to Friday afternoon at 3:15 pm. Specifically, the extended trading hours (ETH) session starts Sunday at 5:00 pm and ends Monday at 8:30 am with the ETH sessions for the rest of the week (Tuesday – Friday) consisting of opening at 3:30 pm the day before and ending at 8:30 am. Regular trading hours are Monday – Friday from 8:30 am to 3:15 pm, just like the VIX futures. All these time periods are Chicago time.
So there are the some of the need to know pieces of information about Cboe Bitcoin Futures. The question I am constantly hearing is, “How will the futures prices relate to spot bitcoin pricing”, and the best (and most honest) answer I can give is, “I don’t know”. I’ve done academic work on the launch of new listed products in the past and prior assumptions about new markets often are off the mark. I’ve heard arguments for the futures trading at both a premium and a discount to the spot price, personally I think the best strategy is to see what the market tells us when bitcoin futures are available for trading.
To see the contract specs laid out or submit bitcoin related questions visit – http://cfe.cboe.com/cfe-products/cboe-bitcoin-(usd)-futures
Also, I did write a blog discussing the volatility of the daily bitcoin price changes and comparing that to VIX which yielded an interesting outcome – http://www.cboe.com/blogs/options-hub/2017/11/14/bitcoin-vs.-vix---what-has-been-more-volatile-in-2017