Bitcoin futures to be traded on TD Ameritrade & CME
- by Shawn Tate
- in Economy
- — Dec 17, 2017
TD Ameritrade, like many other titans of the financial world, is also jumping on the Bitcoin bandwagon.
To determine pricing, CME will tie futures to a bitcoin reference rate, which is an average of four exchanges. This elevated status will be given a further boost in the coming days as two more players enter the game.
Since they were introduced, bitcoin futures have traded at a premium to the spot price of bitcoin.
Bitcoin prices hit a record high of US$17,428 on Friday, amid warnings that it was a bubble on the verge of bursting.
On Dec. 1, 2017, the U.S. Commodity Futures Trading Commission announced that three futures exchanges - the Chicago Mercantile Exchange Inc., the CBOE Futures Exchange and the Cantor Exchange - self-certified that they will be listing futures contracts (CME and CBOE) and options (Cantor) referencing bitcoin.
Competitor Cboe, which launched bitcoin futures December 10, will offer contracts as low as 1 bitcoin. This will result in a lot more liquidity and a lot more participation from retail traders.
TradeStation, another brokerage firm offering clients exposure to CBOE bitcoin contracts, on Wednesday had between 10% and 15% of the transaction volume according to Nicholas LaMaina, senior vice president strategic brokerage services.
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A similar undertaking was made by Interactive Brokers, who did now allow shorting and required a 100% margin on bitcoin futures.
"Right now we are taking the same approach we did with the Cboe product, to wait and see how it goes", Mackenzie said, Bloomberg reported. The one who would like to participate in a volatile financial market but would not like to own the actual cryptocurrency.
"While cryptocurrencies indeed are an interesting asset class, there are a number of potential issues that we think need to be addressed first before launching any related products", said the spokesperson.
Volume on the CBOE contracts that have been trading over the past week has been a little on the low side according to a CNBC report.
In just the last 24 hours, about a half-million bitcoins alone have changed hands.
The majority of crypto currency traders are based in Asia, outside the USA where futures contracts are not available and the digital currency is traded directly.
Therefore, given these facts, the fundamental bitcoin analysis shows that bitcoin is headed for even more growth this coming week.
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