The second major financial derivative based on bitcoin is starting to trade on the Chicago Mercantile Exchange.
The CME Group, one of the US's greatest exchanges of options and fiancial derivatives ,made available bitcoin futures and options for trading at 6 p.m. EST Sunday. The initial price for bitcoin futures was $20,650, and the virtual currency was trading at $20,135 at 6:08 p.m. EST.
The virtual currency has skyrocketed in popularity and profit this year while drawing doubts about its unpredictability.
The CME bitcoin futures contracts, like the bitcoin futures that now trade on the Chicago Board Options Exchange, do not need real bitcoin. They will monitor an index of bitcoin price. Each contract will be for 5 bitcoin.
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Physically settled bitcoin futures would also need to get the green light from the Commodity Futures Trading Commission.
The CBOE futures are based on the auction price of bitcoin on the Gemini Exchange , which is owned and operated by the bitcoin billionaire? Winklevoss twins Cameron and Tyler The Chicago Mercantile Exchange (CME) will launch bitcoin futures next week. Bitcoin futures based on the Gemini auction prices are traded exclusively at Cboe Futures Exchange. Dominic Marella, the head of business development at futures broker Icon Alternatives, which has been trading Bitcoin futures, said trading has been orderly but tepid.
CFDs are derivatives products that allow you to trade on live market price movements without actually owning the underlying instrument on what your contract is reliant.
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