Quote from: DrGregMulhauser on June 27, 2014, 04:22:27 PM

Quote from: twiifm on June 25, 2014, 03:10:07 AM

Theres no hedge for bitcoins. Hedging is taking both sides of trade.

For example hold long bitcoin position. Sell bitcoin call option.

Since theres no options market for bitcoin theres no hedge

Strictly speaking, hedging does not mean "taking both sides", it means taking positions which move in opposite directions -- such as in your example of a long position coupled with a short call against the position.

In addition, the list of types of positions which might move opposite to a long position in BTC is not exhausted by options; futures (e.g., ICBIT) and leveraged CFD-style products (e.g., BTC.sx) can perform a similar function.

"Taking both sides" & "taking sides of both directions" essentially mean the same thing. Way to nitpick semantic to look smart. Impressive

If the investor want hedging, then he wants to use options not futures.

Buying bitcoin futures is not much different than buying bitcoin on margin. Doesn't make sense for investors who want to hedge. Buy bitcoin / sell bitcoin future. If this is a 1:1 delta hedge is pointless. If you think the bitcoin price will drop just sell your position b/c you achieve the same thing

It makes sense for miners though. Mine bitcoin/ sell bitcoin futures @ todays spot price if you think price drops in future.

Also its retarded to hold a position w one broker and hedge it on another if you are an investor. There will quite a bit of slippage trying to manage the 2 positions separately.

I trade options professionally but not futures so I won't comment about futures. But I know its pretty common for futures traders use options to hedge their futures positions

have you used any of the 2 services you recommend? Because BTC.sx doesn't even seem like a legit business. They force you to register account just to peak at the website & the CEO only has one interview on youtube thats extremely vague and smells of marketing BS