CBOE Bitcoin Futures Contract Specs

On December 10th 2017, the CBOE will launch bitcoin contracts for trading on their futures exchange. Below is a description of the key facts associated with the CBOE contracts. My initial thoughts are that with a contract size of 1 BTC on the CBOE compared to 5 BTC for the CME contract, the smaller CBOE contract might make it more accessible to retail traders. I also think that the two contracts with different sizes with some slight basis risk (due to the reference price each contract uses) will complement each other by adding greater liquidity in a similar way that e-mini and miNY contracts did with other futures contracts. Both contracts will be cash settled based on their respective underlying indexes.

If they take off, another outcome of the CBOE futures contracts is that Gemini Exchange will likely get a lot more volume and attention; this is probably good for the Winklevoss twins’ business.

Here are the CBOE contract specs:

CBOE Bitcoin (USD) futures (XBT) are cash-settled futures contracts that are based on the Gemini auction price for bitcoin in U.S. dollars.

Contract multiplier is 1 bitcoin.

Ticker Symbol: XBT

Contract Expirations: “The Exchange may list for trading up to four near-term expiration weeks (‘weekly’ contracts), three near-term serial months (‘serial’ contracts), and three months on the March quarterly cycle (‘quarterly’ contracts).”

“Market Orders for XBT futures contracts will not be accepted. Any Market Orders for XBT futures contracts received by the Exchange will be automatically rejected. Stop Limit Orders are permitted during regular and extended trading hours for the XBT futures contract.”

Minimum Price Intervals: 10.00 points USD/XBT (equal to $10.00 per contract). The individual legs and net prices of spreads in XBT futures may be in increments of 0.01 points USD/XBT (equal to $0.01 per contract).

The reporting limit will beĀ 5 contracts (this seems quite low, but maybe this is something that the CFTC wanted)

There will be price limits: please consult the exchange website for more information.

 

 

Bitcoin Futures on CME December 18th

Today the CME announced bitcoin futures trading will begin on December 18th, 2017. This is very exciting news for crypto market participants. Trading in bitcoin futures on a CFTC regulated exchange will move bitcoin closer to the mainstream, add practically unlimited liquidity, and provide bitcoin holders with a way to hedge their bitcoin price exposure to the USD fiat economy.

The CME bitcoin futures contracts will be cash settled based on the CME CF Bitcoin Reference Rate (BRR), which aggregates bitcoin trading activity across several spot exchanges between 3:00 p.m. and 4:00 p.m. London time each day. The contract size will be 5 bitcoins; given the current price of $10,000 BTC/USD, the notional value of each contract might be around $50,000. This contract size is probably too big for the average retail trader, but good enough for the rest of us.

FAQ: CME Bitcoin Futures – CME Group – CME Group

Get answers to frequently asked questions about CME Bitcoin futures, including when contracts will launch, how to trade and contract specs.

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