What is margin trading in bitcoin futures?

One aspect of Bitcoin futures is margin trading, which essentially means that an investor only requires a percentage of a contract’s total in order to participate. Leveraging 10-20% of a Bitcoin future means that an investment has both a high potential for profit, but also for a loss.

What is the initial margin on a futures contract?

While a futures contract may have a very high value, a trader can buy or sell the contract with a much smaller amount, which is known as the initial margin. The initial margin is essentially a down payment on the value of the futures contract and the obligations associated with the contract.

What is CME's bitcoin futures contract?

CME’s Bitcoin futures contract, ticker symbol BTC, is a USD cash-settled contract based on the CME CF Bitcoin Reference Rate (BRR), which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin.

What are bitcoin futures?

Futures are a type of derivative contract that obligate two parties to exchange an asset—or a cash equivalent—at a predetermined price on a future date. When investors buy and sell Bitcoin futures contracts, they are speculating about BTC’s future price.