Sergey Savastiouk's Avatar
published in Blogs
Dec 12, 2017

Will Futures Trading in Bitcoin Kill the Rally…or Fuel It?

Bitcoin trading reached a major milestone this week—it is now part of the futures market. As of Sunday, December 10, the Cboe Global Markets became the first exchange to launch bitcoin futures, which allows traders to bet on the future price of the surging cryptocurrency. To be sure, a futures trade is a risky one – traders must bet on whether they think the price of bitcoin will go higher or lower, and by how much. Given how volatile the price of bitcoin has been—and how little fundamental drivers there are for rising or falling prices—the trader is basically betting into the unknown.

In fact, since the price of bitcoin is so volatile, Cboe traders of futures contracts in bitcoin will be required to have at least 44% of the bitcoin settlement price set aside as collateral for their bet, in the event that the price goes the other way. It’s normal for the trader to have to set aside some capital to make a futures trade, but normally it’s in the range of 10% of the settlement price. For futures traders in bitcoin, 44% of the settlement price could mean having a good crop of cash on the sidelines, since it’s been pretty much nothing but up in recent weeks for bitcoin. The price surged to $17,000 last Thursday.

The Cboe futures product will trade under the ticker XBT, and until the end of December, the Cboe will waive all transaction fees for bitcoin futures. If you’re an investor who thinks you want to buy a futures contract, you will generally have to go through your broker or hire one to make the trades. That can be a tough proposition since many brokers are waiting on the sidelines for now. TD Ameritrade, Charles Schwab, Fidelity, and eTrade (which are all discount brokers) are holding off on allowing clients to participate. Ally Financial, however, is allowing clients to buy.

 

 

As far as the big investment banks are concerned, JPMorgan and Citigroup—who are two of the biggest players in futures markets—did not participate in the Cboe futures market for bitcoin on Sunday, and the CEO of JPMorgan, Jaime Dimon, has reportedly referred to bitcoin as a “hoax.” Goldman Sachs settled some futures trades for their clients, however.

The opening of Cboe’s futures market for bitcoin, if anything else, will open the door to big banks and exchanges recognizing bitcoin as a legitimate trading asset and having more market participants trading in it, which may very well serve to reduce the volatility over time. As far as whether the futures market will lead to more price surging in bitcoin or perhaps result in a major correction, there is really no way to know. But markets tend to be made more efficient the more traders are allowed to participate, which is what Cboe’s futures market for bitcoin allows for.

Sergey Savastiouk's Avatar
published in Blogs
Mar 14, 2023
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Dmitry Perepelkin's Avatar
published in Blogs
Mar 14, 2023
5 Habits that Lead to Successful Investing

5 Habits that Lead to Successful Investing

To consistently make money in this industry, you need emotional fortitude, an analytical mind, and a willingness to self-reflect. Despite trading and investing being two different activities, these principles can be applied to both.Conversely, investors with good habits often become great traders.  Rather than full sentences for titles, we’ve labeled each of our top-five investing habits using a single word principle.
Allana's Avatar
published in Blogs
Mar 23, 2023
What’s the Difference Between Data Analytics and Machine Learning?

What’s the Difference Between Data Analytics and Machine Learning?

Artificial intelligence (AI) technology is developing rapidly.Data mining can deliver raw numbers, but it does not necessarily provide actionable insights. Structure is necessary to taking abstract information and extracting commonalities, like averages, ratios, and percentages.
Sergey Savastiouk's Avatar
published in Blogs
Mar 13, 2023
4 Tips for Fast, Effective Stock Analysis

4 Tips for Fast, Effective Stock Analysis

With just a few clicks, an investor can search for individual stocks, categories of stocks, sectors, or investment themes, and then he or she can conduct a full range of technical and fundamental analysis within seconds.All powered by Artificial Intelligence.  Below, we give you 5 tips for fast, effective stock analysis using Tickeron’s Screener.
Sergey Savastiouk's Avatar
published in Blogs
Mar 20, 2023
5 Golden Principles in Investing

5 Golden Principles in Investing

You have enough faith in that stock, based on research, that the return will equal or exceed the investment.  Do unto others.The principles outlined here will ensure that happens.  Principle #1: Diversification Investors can’t be one-dimensional when constructing a portfolio.
John Jacques's Avatar
published in Blogs
Mar 24, 2023
If Hedge Funds are Using AI to Invest, Why Shouldn’t You?

If Hedge Funds are Using AI to Invest, Why Shouldn’t You?

Some of the world’s biggest financial institutions have devoted multi-million dollar budgets to developing algorithms that can find patterns in the market, identify trends, and perform automated trading designed to take advantage of even the smallest price movements. The AI revolution is so big that as it stands today, the world’s five biggest hedge funds all use systems-based approaches to trade financial markets.Indeed, quantitative trading hedge funds now manage $918 billion (according to HFR), which amounts to 30% of the $3 trillion hedge fund industry – a percentage continues to grow with each year that passes.
Sergey Savastiouk's Avatar
published in Blogs
Mar 15, 2023
The five most important Lessons Learned After 10,000 hours of Trading

The five most important Lessons Learned After 10,000 hours of Trading

Ten thousand hours of active trading, broken down into forty-hour weeks, amounts to almost five years. Having surpassed that milestone myself, I now understand why it's significant for any trader's journey. The early years taught me valuable lessons that have shaped my approach to trading. It's a misconception that great traders are born with innate talent. The truth is that it takes years of...
Edward Flores's Avatar
published in Blogs
Mar 12, 2023
What's the Difference Between Tokens and Altcoins?

What's the Difference Between Tokens and Altcoins?

Between their inherently technical nature, multiple varieties and sub-varieties, and endless terminology, cryptocurrency (defined here as digital or virtual currencies that are encrypted using cryptography, powered by the immutable digital ledger known as the blockchain) represents a whole, complex world.All altcoins possess their own blockchain, independent from their source code, that records all transactions of their native coins. Many altcoins are variants, or forks, of Bitcoin that leverage that cryptocurrency’s open-source protocol as the basis.
Edward Flores's Avatar
published in Blogs
Mar 26, 2023
Why it Pays to Invest in Dividend Stocks Over the Long Term

Why it Pays to Invest in Dividend Stocks Over the Long Term

Where smaller, more volatile companies can placate shareholders with higher returns, larger companies often use dividend payouts to entice new investors and hold their existing ones. These low-risk options may not work for every investment approach, but dividend-producing stocks can offer great benefits under the right circumstances – especially for portfolios built for the long-term.Beyond the ability to rely on these semi-regular payouts as an income stream – a strategy favored by retirees – dividends are an excellent vehicle for compounding earnings through reinvestment.
Edward Flores's Avatar
published in Blogs
Apr 02, 2023
How Artificial Intelligence Can Improve Fintech

How Artificial Intelligence Can Improve Fintech

Artificial intelligence (AI) and fintech have an inherent compatibility that has become clearer as each sector has matured, with recent growth and successes on their own accord bringing new ideas about how they can work together.AI can analyze information at far greater quantities (and far more quickly) than any human, making it a natural fit to help fintech firms streamline and automate processes that benefit customers and businesses alike. Fintech has brought a revolution of convenience to the finance world.