On Wednesday, November 14, 2018, bitcoin futures contract (XBT) will expire. Currently, bitcoin is trading about 0.74 percet down around $6,360 levels in the 24-hour period. Since last year, the CBOE enabled investors to trade in bitcoin futures by buying and selling them. This would mean that only 44 percent of the price should be paid by either an individual or an organization. Amidst volatility in price, though relatively stable in October, there are also risk factors though crypto coins are branded as riskier one.
At the time of writing this, bitcoin futures for November 14 is trading at a discount of $45 at $6,275 compared to the settlement price of $6,320. While the high is about $6,325, the low is $6,235 with a volume of 590. This would mean that the loss might be higher than the previous settlement difference of $25. During the 7-day period, the price of the virtual asset is trading with a loss of 1.19 percent.
According to the CBOE, which is one of the world’s largest exchange holding companies, there is three more bitcoin futures contract that will start expiring from December. At any point in time, there are four sets of the futures contract, and the immediate one is on November 14.
Cboe XBT futures contract offer additional price discovery apart from transparency since it is regulated and surveilled product besides being listed in an exchange. The future contracts help participants to manage the risk with its tool. Aside from these, there is exposure to the virtual asset without any wallet requirements, and the settlement is done directly with a traceable bitcoin auction price relative to an average price.
In short, XBT futures enable investors and traders to hedge their position in underlying bitcoin. Similarly, they could trade at the price of the cryptocurrency even without having bitcoin.