This thing is totally unhinged from the underlying asset. Is that how Wall St. do?
Seems like... Maybe it'll level out in time?
I would like to see a futures market that enforced delivery. that would actually have some use for miners and others that are trying to hedge risk.
This seems like a pure derivative market adding risk instead of mitigating it...
I suppose time will tell.
They are not used to "delivery". Who in their right senses would want a fucking BUNCH of soya being delivered to them? What about logistics?
Even gold is cumbersome enough.
They are not used to an asset as easily deliverable as Bitcoin is.
Typically the brokerage that facilitates the trade will settle prior to the delivery date.
http://futures.tradingcharts.com/tafm/tafm10.htmlThe whole point of futures was supposed to be delivery of a certain commodity at a certain date for a certain price.
Of course, as with everything else, the point has been lost over time...
Yeah, but getting into the logistics of delivery of assorted assets would be too complex for the exchange. So now, imagine you are a big soya distributor so you really need the soya for your business. You can still use the future markets to hedge/fix a price in advance. If soya prices are higher when you need to buy it, you get the profit of the future contracts you have at a lower price and use the extra profit to buy the soya.
Basically it works the same.