Brokerage Firm to Allow Negative Bets Against Bitc
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Posted On: 12/13/2017 1:26:31 PM
Brokerage Firm to Allow Negative Bets Against Bitcoin
https://cointelegraph.com/news/brokerage-firm...st-bitcoin
In a move that could shift the trading dynamics of Bitcoin futures, the brokerage firm Interactive Brokers Group Inc will allow its traders to begin betting against the cryptocurrency. The firm’s CEO Thomas Peterffy told the Financial Times that clients will be allowed to short Bitcoin futures by the end of this week.
The announcement comes on the heels of a strong bull market after Bitcoin futures trading began this week. However, according to the Financial Times, Interactive Brokers is handling an estimated 53 percent of the total futures volume on 4 Board Options Exchange (CBOE) --- a sudden open short potential could reverse the bullish trend.
Massive cost, massive risk
While opening the door for shorting Bitcoin, Interactive will require that short positions deposit five times the value of their futures contracts in order to protect the brokerage.
In concrete terms, to short Bitcoin futures purchased on CBOE, an investor would need to margin $100,000. This margin would be nearly $500,000 for Bitcoin futures purchased at CME, where contracts are five times the size.
With no limits to potential losses on short positions if Bitcoin continues to rise, Peterffy himself points out that betting against the cryptocurrency is especially risky, stating:
https://cointelegraph.com/news/brokerage-firm...st-bitcoin
In a move that could shift the trading dynamics of Bitcoin futures, the brokerage firm Interactive Brokers Group Inc will allow its traders to begin betting against the cryptocurrency. The firm’s CEO Thomas Peterffy told the Financial Times that clients will be allowed to short Bitcoin futures by the end of this week.
The announcement comes on the heels of a strong bull market after Bitcoin futures trading began this week. However, according to the Financial Times, Interactive Brokers is handling an estimated 53 percent of the total futures volume on 4 Board Options Exchange (CBOE) --- a sudden open short potential could reverse the bullish trend.
Massive cost, massive risk
While opening the door for shorting Bitcoin, Interactive will require that short positions deposit five times the value of their futures contracts in order to protect the brokerage.
In concrete terms, to short Bitcoin futures purchased on CBOE, an investor would need to margin $100,000. This margin would be nearly $500,000 for Bitcoin futures purchased at CME, where contracts are five times the size.
With no limits to potential losses on short positions if Bitcoin continues to rise, Peterffy himself points out that betting against the cryptocurrency is especially risky, stating:
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There is a VERY HIGH degree of RISK involved in trading and investing. Only invest what you can afford to lose.
As used herein, the terms "You" and "Your" shall mean you, individually, the reader, and each other party on whose behalf you may use the contained information at any time.
All references to "My", "I", and “The writer of the above post” shall refer to the creator.
Do NOT invest unless you are prepared to sustain a total loss of the money you have invested plus any commission or other transaction charges.
There is a very high degree of risk involved in trading and investing. Past results are not indicative of future returns. I assume no responsibility for your trading and investment results. You should NOT rely on the information in the above post to make any decision or take any action.
ALL OF MY STATEMENTS, including but not limited to, POSTS, MESSAGES, PRIVATE MESSAGES, and RESPONSES are OPINION and NOT fact and are for entertainment purposes only. Do your own research and make your own decisions based on your own conclusions.
ALL OF MY STATEMENTS, including but not limited to, POSTS, MESSAGES, PRIVATE MESSAGES, and RESPONSES are NOT advice. It is your responsibility to seek investment advice during all stages of your investments. It is your responsibility to evaluate the accuracy, completeness and usefulness of the information in all and any posts.
My posts are NOT investment advice. I am not paid to post.
The writer of the above post shall NOT accept any liability for the accuracy or completeness of the information contained in the above post, for any reliance placed by any person on the information contained in the above post, or for any damage or loss, however caused, in connection with the use or reliance on any information contained in the above post.
The above post may contain links to websites owned and operated by third parties.
YOU ACCESS ALL LINKS ENTIRELY AT YOUR OWN RISK.
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