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Bitcoin Futures Contracts Basics TD Ameritrade Network Futures

pBitcoin Futures Contracts Basics TD Ameritrade Network: Futures But there are a couple key differences between the product that are important that you take the time for, right? So the very first thing I would like to emphasize between it is that the CMEs product is 5 bitcoins versus the CBOEs which is 1 bitcoin.

Bitcoin Futures Contracts Basics TD Ameritrade Network Futures

So thats a big difference when you think about it. So when you look at that, that 5 bitcoin to 1 is the first thing to think about. The second thing I would say to look at is, how does the tick size work? With the CME product, its a 5 per coin so think about that.

Thats 5 then per coin times 5 or 25 versus the CBOE product, which is 10. And then finally the last thing is, there is a little bit of difference between the actual trading hours Not a ton, but a little bit so you need to keep track of that as well. And then finally the last two things to highlight is, one, there are differences in exchange fees. The CMEs product is 5 versus 50 for the CBOE.

And that last one, of course, is the margin requirement. But the big thing about the margin requirement to emphasize here is, while CME is 47 and CBOEs is 44, think about it. You have to do that from a notional value standpoint. So you take where the price is, lets say roughly at 20, 000, multiply that by 5 thats how you get the CME product times that 47.

So youre talking about a very large number to place a single trade versus on the CBOE using the same number, using that 20, 000, multiply that by 44. But in both cases, and especially the CBOE, we do have increased margins that we are using right now because of the fact that the product is new and its got some volatility. All right, so increased margins, JB, a little bit of information there in terms of the difference between the two products. As far as some of the specs goes, Im curious as far as the difference in the two products as far as the launch last week at the CBO versus the launch last night at the CME. What stood out to you?

What was really interesting about this was the fact that the CBOE product had a much bigger response. And I think theres a real reason to highlight the or the why of this is because this is a retailedfocused product. Its a single coin its not that expensive.

So in the first two hours of the CBOEs launch, over 2, 000 contracts traded. When you compare that versus the CME, they had less than 300 trade. So what you saw here was sort of a very tepid response, where that CME product has more that institutional feel to it versus the CBOEs, which has more that retail product. And you kind of can watch that go for the rest of the day. Overnight right now, a little under 2, 500 products contracts have traded for the CBOE.

Around 700 for the CME. So you see a little bit more of a tempered or tepid response to the CME product. I think thats just because the fact its just not that much of a retailfocused product today.

JB, I think there is a from my naked eye, I think theres a clear difference between the two products. And what youre saying is significant. I look at the one versus the five. I look at the exchange fees.

I think youre right. I think the CBOE is more geared towards the retail investor, right? So which one is gonna win out over time, though, is the real question, right? Wheres the big volume coming from?

No, I think thats exactly the big question thats out there. I think what youve seen is that the CBOE went after a specific subset of customers, and that subset of customers were retailbased customers. And they reached out to them, and they said, Hey, look. This is a product I know you want to trade. Look, you dont want to necessarily have to use as much money as it costs to buy a single bitcoin if you really wanted that cash market.

So CBOE has been able to leverage and grab that piece, grab that customer base, and thats where theyre attracting. Youre starting to see that happen this week. Again, very good flows to start off this week. You want to see that continue. Strong flows overnight, and thats the other thing to remember.

These are 24hour products, right? So watching them and making sure that theres liquidity in the Asian hours and the European hours and then the U.S. hours is really important to see the success of the products.p

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