Cboe is seeking to lower bitcoin future prices

Posted: 24 April 2018 4:00 pm

The exchange is working to reduce US dollar bitcoin futures minimums from 10 points ($10) to 5 points ($5).

Cboe Futures Exchange (CFE) has petitioned the Commodity Futures Trading Commission (CFTC) to lower the minimum buy and sell prices of its futures contracts, just a few months after officially launching the products.

In a letter to the CFTC dated April 17, CFE managing director Matthew McFarland submitted an amendment to “change the minimum increment” for US dollar bitcoin (XBT) futures from 10 points ($10) to 5 points ($5).

There are different minimum increments for XBT futures for the individual legs and net prices of spread trades. McFarland said that the proposed increments would only affect single leg transactions (one contract) and not spread trades (which require the purchase and sale of two different contracts).

CFE believes that the amendment will contribute to a competitive, open, and efficient market and mechanism for executing transactions that protects the price discovery process for trading in XBT futures in CFE’s centralized market.

CFE managing director Matthew McFarland on proposed futures contract changes

“CFE will continue to evaluate its experience with the trading in XBT futures and may determine to make future changes relating to XBT futures in light of that experience,” McFarland said in the letter.

Cboe, the largest US options exchange, began trading bitcoin futures in mid-December last year. About one week later, Chicago Mercantile Exchange (CME), started offering futures contracts to prospective investors.

Late last month, Cboe urged the Securities and Exchange Commission (SEC) to permit the advancement of cryptocurrency exchange-traded funds (ETFs) in the same way that commodity-related products are allowed.

Long-term future pricing options has been touted as a vote of confidence for the virtual currency economy, potentially paving the way for less market volatility and further increased investment over time.

New data released this week shows cryptocurrency funds have suffered a significant fall from grace since the beginning of the year, highlighting the extremely speculative and volatile nature of these unseasoned assets. The statistics reveal that in January 2018 cryptocurrency funds lost 11.63%. In February, the funds fell further, down 9.04%. March saw the worst declines, as the digital currency funds slipped again, tumbling by 29.15%.

You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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