How to hedge BTC futures
Now the popular digital currency futures is bitcoin futures. On December 11, 2017, Beijing time, CBOE launched the bitcoin futures XBT, and the market reaction was hot, triggering the circuit breaker mechanism many times. CME of Chicago Mercantile Exchange launched bitcoin futures BTC on December 18, 2017, which brought about great fluctuation
the two major bitcoin futures procts have the following similarities and differences, which are worth noting:
1. XBT unit is 1 bitcoin, BTC is 5 bitcoins
The minimum price change: XBT is $10 / bitcoin, BTC is $5 / bitcoin XBT trading time is from 7:00 on Monday to 6:00 on Saturday, Beijing time; BCT trading time is from 7:00 on Monday to 4:15 on Saturday, Beijing time4. The position limit was 5000
Price circuit breaker mechanism: XBT price fluctuates more than 10% of the previous day's closing price, trading is suspended for 2 minutes, more than 20%, trading is suspended for 5 minutes; The BTC price fluctuates more than 7% or 13% of the closing price of the previous day, triggering the circuit breaker mechanism. The specific suspension time has not been disclosed. If it exceeds 20%, the trading will stop XBT requires 44% initial margin, which is about 2 times leverage; BTC Requires 35% of the initial margin, which is about 3 times the leverage. It is worth noting that both exchanges have indicated that the margin amount can be adjusted according to the actual situationthe leverage performance of bitcoin virtual contract is the leverage stability of the revenue level of legal currency: if you invest US $100, the revenue you can get = US $100 * the rise and fall of bitcoin * the fixed leverage ratio
assuming that the current price is 500usd / BTC, an investor can buy a BTC at the current price with the principal of 500usd. At this time, the investor can make 50 more BTC virtual contracts. At this time, if the BTC price rises to $750, or 50%, the investor's contract income is 3.3333 BTCs, which can be sold at the current price to get $2500, and the income is five times of the principal investment. If the price rises to $1000, the contract revenue is 5btc, and the dollar revenue after selling is $5000, which is 10 times of its dollar revenue. No matter how the price fluctuates, the leverage of the contract is very stable, which makes it convenient for business and household contracts to hedge and ordinary investors to manage their positions.
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Guangdong Open University