Current Affairs Telugu Daily
Bitcoin entered into future market of Chicago Exchange
The Chicago Board Options Exchange (CBOE) launched bitcoin futures on its exchange for trading. The bitcoin futures are cash-settled contracts that settle to a single, tradable auction price. Bitcoin futures listed on CBOE are based on the cryptocurrency’s prices listed on the Gemini bitcoin exchange. These futures on this exchange are traded in dollars. The contract multiplier is one bitcoin. Futures are derivatives—financial securities that depend on the value of an underlying asset and the expectation on the future price trend. Futures are priced as per the underlying security. In a futures contract, when you buy something, you buy it with a promise to pay at a future date. And when you sell something, you have to deliver it to a buyer at a future date.
The future dates are pre-decided. However, you don’t actually exchange the physical product. Instead, you settle the cash against the value of the contract. Short-term futures tend to see higher trading and can be for a period of 1 month, 3 months and so on, while long-term futures can be defined for 1-3 years.
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