Not sure if I’ve mentioned it earlier in the thread, but a long time ago an IRC buddy was raving on about this new bitcoin thing, and I installed an app that made coins played around with it for a while, saw it only at 20% and I couldnt be bothered to leave PC on overnight just to make a single coin or two and then wrote it off as a waste of time. I kept a professional interest in cryptocurrency but it was only when the frauds and scams started appearing and made for amusing stories i kept more than just the cursory eye on things.
I do like to fantasise about what if i made a few hundred coins and didnt cash out at socks/£10/£50 and actually kept hold of them. Oh and had a means to cash out in a secure, safe manner.
I’m a bit confused. Isn’t a future just what they call option action? The option is to excercise the transaction at a specified price. So if I buy a Jan 15 option at a $19,000 strike price and Bitcoin goes up to $21,000 before then I make $2000 per option contract if I find a buyer. The buyer then can exercise that option (hopefully when it goes up even further) or sell it again. Eventually the option expires worthless.
“Futures” are simply the name for the spread in between calls and puts, to see which way the underlying commodity will move. You don’t actually buy futures, you buy options which are a contract. Futures are a metric.
Am I missing something? I’ve been trading options for years and that’s how it works everywhere, wether it’s pork bellies, currency or stock.
An option is precisely that - the right, but not the obligation, to buy (call) or sell (put) the underlying at a given price within a given timeframe. A future is a commitment to do the same.
No, you are trading options on Futures. An actual futures contract is not an option, it is a agreed upon deal. If you buy/sell a Jan 15 Future then come Jan 15th (actual details very complicated depending on the product) you are obligated to make that deal regardless of if it is positive or negative vs current market conditions.
If you trade actual Futures contracts then it is not an optional transaction, you have to make on the delivery date. For instance, if you buy an actual Futures contract of something that settles from actual delivery (say corn) then come expiration date if you have not turned around and sold that to someone then you have to have liquid cash and a silo lined up because you’re getting ~127 Metric Tons of corn.
Doesn’t really matter so long as speculators keep the value of the damn things in the stratosphere. If there’s any way whatsoever to trade them for cash, that’s enough given current “capitalization” levels (ha). And today that’s well over $300 billion. I assume it will crash eventually, but until then there’s more than enough volatility and value for people to exploit one another over bitcoins.
I don’t think bitcoin will seriously crash any time soon, barring a whale suddenly deciding to sell off everything they have.
However, part of the inflation is due to the economic upswing and people having money to spend on speculation. If there is another economic crisis, like say another housing bubble bursting, cryptocoins will be the first thing to be dumped.
The thing which would most proximately cause a crash is China deciding that bitcoin wallets are the same as offshore deposits and seriously banning them. I’m sure there’s a lot of tension over the subject there, since on the one hand the ultrawealthy ruling class needs someplace to hide their cash that is easily convertible abroad, and on the other hand the state they embody doesn’t want a lot of cash around that they can’t control.
Crashed to 10k briefly too some places lower depending on the exchange.
I mean, not to disagree with your general point, but it’s entertaining to me how fast it can swing around. It’s so volatile it’s hard to even discuss a price.
It’s pure gambling at this point. There are literally zero “fundamentals” that can guide trading for it.
You could theoretically do some processing of the trend itself, but since it’s so unmoored from reality the only thing that would sorry such an analysis would be if other trades are making the same assumptions… But if that’s true, then your best bet would be to go against that trend and manipulate those other traders.
I told my buddy last week to get it at 20k, because it was never going to sustain that price. Some folks are like, “it’s going to go to 300k!”
“This bitcoin is worth $20k!”
“Why?”
“Because that’s what you’ll pay for it!”
“I don’t understand why I’d pay $20k for a bitcoin.”
“Oh, because it will be worth $25k in a half hour.”
“That’s weird. Why would it go so much up in a half hour?”
“It’ll go up because that’s how much you’ll sell it to the next guy for. Don’t you understand the genius of bitcoin?”
