Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

If it triggers the 20% price either up or down, do the winners automatically win and the losers automatically lose? Right then and there?

no. the trading on the exchange just stops, see here for details: http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures/contract-specifications

Ok, so I guess the 20% is the maximum exposure then? If starting price is $10,000 and you bet it to go up, you really can't profit if it goes higher than $12,000?

Similarly, if you bet it to go down, you can't profit even it it drops under $8,000?

So no incentive to keep pumping it up if it's at $12,000 but it really needs to be at that price at the close of trading if you bet it for 24 hours, and seems like the price opens at 6pm Eastern and closes at 4pm Eastern the following day?

it's still uncertain how this will play out. but the bets are for one month approximately and now you can see why the CEO of international brokers is hesitant to allow trading of this derivative vehicle.

On CME there is daily settlement so you will just be instarekt when trading opens the next morning and you get margin called. At least the margin requirement exceeds the daily limit.

On CBOE I dont think theres daily settlement so the shorts are massively exposed. You would want to be fully hedged or be a miner. There is no way 30% margin is adequate for a short over a month period. Thats a joke. CBOE is far more a dangerous product but the risk is mostly borne by CBOE.

I think this is why the international brokers dude will not allow shorts. at least on the long side your risk has some limit. if the price goes down it can only go down so far... if you watch the video he explicitly states the risk to his firm if the price goes up. There is no limit to the upside risk. There is no limit to fiat money.