Most of the subjects we tackle here in Know Your Options are about equity options.
Lately, though, there’s been a lot of interest in trading futures and options on cryptocurrencies like Bitcoin.
If you have an opinion on the direction of commodity prices, you’ll find liquid futures and options available on the CME Group’s Globex trading platform.
Because of the opportunity for traders to make low-risk arbitrage profits if the prices were to diverge, you’ll find that the prices on the two contracts are almost always identical.
First, you’ll need to be able to trade futures in your brokerage account.
So if you were to buy one Bitcoin futures contract for a price of $55,000, you now own 5 coins for a total notional value of $275,000.
The important thing to remember is that these are big contracts.
Though there are colorful anecdotes about a trader who neglects to close a position and has 5,000 bushels of corn deposited on his front lawn and it’s good comedy, it’s not true.
In the case of Bitcoin, this is less of an issue.
That means that if you own a call option that expires in the money, you are now long a futures contract at the strike price.
If you didn’t want the futures contract, you could simply sell the option in the open market prior to expiration.
Just as with stock options cleared by the Options Clearing Corporation, the CME Clearing Corp acts as the counterparty to all transactions, guaranteeing the trades by requiring margin deposits.
Trading futures and options on futures doesn’t need to be confusing.
Next week in Know Your Options, we’ll take a look at some ways to gain Bitcoin price exposure using conventional equity options.
The event, coming less than a year after the Fed had to inject $2 trillion into the bond market in the space of about five weeks to keep it from a complete melt down, “highlighted the importance of continued focus on Treasury market resilience,” the Fed said in its semi-annual Financial Stability Report.
and China create headaches for countries seeking to stay on good terms with both.Still, the region’s economies generally have more room for error than most of their counterparts, according to Baig at DBS.“No emerging economy in Asia at present is characterized by debt sustainability concerns or a dramatic collapse in investor sentiment, which seems to be the case in a number of emerging economies elsewhere,” said Baig.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Sydney time, two hours earlier than planned.The upsizing highlighted the strength of investors’ appetite for new listings, after Australian firms priced nearly $2.3 billion of IPOs so far in 2021, the most year-to-date since 2007, according to data compiled by Bloomberg.Read More: IPOs Boom at the Fastest Pace Since 2007 in AustraliaThe deal is one of two involving KKR’s portfolio companies in the country’s market this week.
Until recently, they expected the government to run into technical default risk in mid- to late-August.Treasury officials said they’re evaluating a range of potential scenarios, including some in which extraordinary measures could be exhausted much more quickly than in prior debt-limit episodes.Still, the projected cash balance of $750 billion at the end of September probably requires Congress to suspend or lift the debt ceiling, according to Wrightson ICAP economist Lou Crandall.“Our guess is that the Treasury won’t have enough leeway to hit its notional September 30 TGA target of $750 billion without a debt ceiling increase, but the Treasury probably won’t be scraping along at rock-bottom levels at that point either,” Crandall wrote in a note to clients.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
With billions of dollars flowing into so-called ESG funds, that’s created a lucrative new line of business that banks are eager to court.The prison business has long been targeted by activists who say the profit-motive gives an incentive to cut costs, hurting rehabilitation efforts.“We call on Stifel and all investors and financial institutions to stop the financing of mass incarceration and urge them to join us in making investments in community-led public health, safety, and infrastructure to become a part of the solution,” Christina Hollenback, founding partner Justice Capital, said in the statement.A client of Stifel, hedge fund Basso Capital, had concerns about the bond deal, the statement added.“As a long-standing trading client of Stifel, we are halting our business with them as long as their policy to finance mass incarceration stands, and we urge other Stifel clients and partners to do the same,” Howard Fischer, chief executive officer of Basso Capital, said in a statement.Related: As Barclays Prison Bond Unraveled, ESG Activists Scored Rare WinFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
stock index futures rose on Thursday ahead of data that is expected to show a decline in weekly jobless claims, while shares of vaccine makers looked to extend losses after President Joe Biden’s plan to back intellectual property waivers on COVID-19 shots.
It’s now down 22% from the close on its first day.Nasdaq had set a reference price of $250 a share on April 13 for Coinbase’s direct listing, a number that’s a requirement for the stock to begin trading, but not a direct indicator of the company’s potential market capitalization.“What has really hurt Coinbase, now that their direct listing has taken off, you’re seeing expectations that other exchanges are coming on board,” said Edward Moya, senior market analyst at Oanda.
The delivered a 153% return in 2020.