Quote from: iammagicmike on November 03, 2013, 10:58:42 PM

I hate to sound like a total nard-dawg, but I don't really understand futures. I kind of want to play along, but I literally do not know what a futures contract is or how to use it.

A future is just an IOU on something other than USD, only its traditionally sold for USD (or other fiat currency).

Basically:

IOU: "You give me $1 now I'll give you $1 + $interest in the future."
Future: "You give me $1 - $interest now and I'll give you $1 worth of Bitcoin in the future."

The funky bit? On ICBIT, due to weirdness & volatility of Bitcoin, its in constant backwardation ($interest is negative assuming the current Bitcoin price). In other words, it only makes sense to own those futures if you think Bitcoin is going to go up wildly.