The second major financial derivative based on bitcoin is preparing to trade on the CME.
The CME Group, one of the nation's greatest exchanges of options and futures contracts ,started bitcoin futures contracts for trading at 6 p.m. EST Sunday. The initial price for bitcoin futures was $20,650, and the electronic currency was trading at $20,135 at 6:08 p.m. EST.
The electronic currency has exploded in popularity and gain this year even while drawing fears relating to its unpredictability.
The CME bitcoin futures and options, like the bitcoin futures that now trade on the Chicago Board Options Exchange, do not involve tangible bitcoin. They will trace an index of bitcoin price. Each contract will be for 5 bitcoin.
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EST for Cboe Bitcoin Futures and at 4:00 p.
The tick size - the minimum amount by which the value of the futures contract can change - is 5 USD per BTC, therefore 25 USD per CME Bitcoin futures contract. Note: Each CBOE bitcoin futures contract relates to the underlying price of one bitcoin. Bitcoin futures will make it easier for more investors to buy the crypto-currency, by removing the need for them to set up a special digital Bitcoin wallet.
A CFD, or contract-for-difference , is a financial derivative that allows traders to profit from price movements instead of actually owning an asset.
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