What are bitcoin futures and how do they work?

Bitcoin futures are futures contracts that speculate on the price of Bitcoin without participants actually having to own Bitcoin.

How many bitcoin futures are traded each day?

When Bitcoin futures debuted on the Chicago Board Options Exchange (CBOE) in December 2017, the CBOE website was overwhelmed. On Bakkt, the Bitcoin futures platform operated by the Intercontinental Exchange, about 11,000 futures contracts are traded each day.

How to trade Bitcoin futures on Chicago Mercantile Exchange?

Trading on the Chicago Mercantile Exchange, investors can go through brokers to purchase and sell these futures contracts. You can use the theoretical formula to make a simple calculation of the futures price from the spot price of Bitcoin. Bitcoin is highly susceptible to volatility, which can have a drastic impact on prices.

What happens when Bitcoin futures expire?

If there are only two days to expiry, the futures price calculation formula simply tells us that the price of the Bitcoin futures contract will remain very close to its spot price because of the time remaining. But its spot price may shoot up or down significantly within hours because of high volatility.