Last year December, the Cboe Futures Exchange, LLC (CFE) launched trading in Cboe bitcoin futures under the ticker symbol “XBT”. The current contract expires in less than 24 hours and it is thought that large contract holders may affect the bitcoin price when closing their positions.
Currently there are four monthly Bitcoin futures contracts available. The first bitcoin futures expired January 17 and was termed a win for the bears. The second contract has had a volatile trading range of 28.4% range with a low of $8,380 and a high of $11,710.
According to Chicago Board of Exchange (Cboe):
“XBT futures provides a way for you to buy and sell bitcoin futures in a highly regulated marketplace nearly 24 hours a day, five days per week. This gives you the flexibility to invest and divest at the optimal time for your specific trading strategy.”
With the high volatility of the bitcoin market coupled with the fact that futures contracts have expiry dates, taking up bitcoin futures is highly risky. Of course, that hasn’t stopped investors from trading the futures and the quarterly volumes are in the region 5000+ bitcoin.
Bitcoin futures trade on Cboe is only open Monday to Friday, between 8:30 am to 3:15 pm, Chicago time. Thus, investors are committed to their positions over the weekends despite the crypto markets operating 24/7.
With the launch of Bitcoin Misery Index, or BMI, on Friday, Thomson Reuters Sentiment Gauge and other trading tools, the volatility of bitcoin may reduce as the market matures and reaches a more efficient equilibrium.