BITCOIN FUTURES!!!! WHAT YOU NEED TO KNOW...
To understand BITCOIN FUTURES and IMPLICATIONS ON FUTURE PRICE, you need to have more than just an expiration date. Expiration dates are meaningless If you have no clue as to which side of the trade has the heavy money and what kind of positions those are.
You need volume data from CME and CBOE and open position and position orientation data from the COMMITMENT OF TRADERS REPORT(COT) from the CFTC.
CBOE BITCOIN FUTURES and CME BITCOIN FUTURES ARE DIFFERENT WITH DIFFERENT VOLUMES.
- CBOE (XBT) CONTRACT VALUE IS 1 BTC
-CME (BTC) CONTRACT VALUE IS 5 BTC
So in order to even get the slightest clue as to where the underlying asset (BTC) MIGHT go as it relates to futures, you DONT look at the current month expiration, that position has already been ran up or down to target for profit. 90% of NON-COMMERCIAL positions will have already taken profit or rolled over to the next month BEFORE expiration date of current month. Some months they trade further out and some months they dont touch the current month until the structure is set up to one side or the other and then you start to see volume come in. reference the pictures below and the following months volume and the current month volume compared to its peak volume. Take a look at the turns on expirations with their corresponding volumes for those contract months.
The ROLLOVER is important IF they are going to continue a move UP or DOWN to the heavy side of action. There is no point to roll over if you know liquidity to one side has dried up and the move is over.
The Volume in the contract at its peak(volume) will determine the type of counteraction to the overall trade as these bigger positions UNWIND. As smart money does, they take profit along the way , they dont just get out all at once . They exit into the traders entering late.
Because of the relatively small amount of BTC in the futures market in relation to the overall market cap of BTC, Some think that futures have no bearing on price direction of BTC. I can see both sides of the argument, but the one fact that stands out the most is that in a HIGHLY manipulated market, the BIG BOYS /SMART MONEY/HEAVY TRADERS can and will make sure their LEVERAGED positions in the futures market make it to target. Its a very small number of BIG position traders who are actually trading the most amount of BTC. (COT REPORT)
The FUTURES market doesnt control BTC, but the big players(firms, banks, funds, whales) who have huge positions that are/may be hedged with futures, have the capacity to work together to run the market to levels for profit . Why do you think you see markets TURN at just the right time with the right FUD. What happens when a trade gets crowded to one side and theres no liquidity to go higher or lower? Do you think everyone just decides to get out and reverse positions at the same time? Doesn't happen...The BIG BOYS turn the market at will.
So to get a better understand of futures and slightly possible direction you need to take into account the volume coming into the contracts and which month while paying attention to market structure and the type of positions being taken by what type of trader in the COT report.
But understand that Not every expiration is going to bring a tradeable event. If the futures data lines up with your own analysis to the possible direction, then that is complementary to your trade and you now have another piece of the puzzle.
You need volume data from CME and CBOE and open position and position orientation data from the COMMITMENT OF TRADERS REPORT(COT) from the CFTC.
CBOE BITCOIN FUTURES and CME BITCOIN FUTURES ARE DIFFERENT WITH DIFFERENT VOLUMES.
- CBOE (XBT) CONTRACT VALUE IS 1 BTC
-CME (BTC) CONTRACT VALUE IS 5 BTC
So in order to even get the slightest clue as to where the underlying asset (BTC) MIGHT go as it relates to futures, you DONT look at the current month expiration, that position has already been ran up or down to target for profit. 90% of NON-COMMERCIAL positions will have already taken profit or rolled over to the next month BEFORE expiration date of current month. Some months they trade further out and some months they dont touch the current month until the structure is set up to one side or the other and then you start to see volume come in. reference the pictures below and the following months volume and the current month volume compared to its peak volume. Take a look at the turns on expirations with their corresponding volumes for those contract months.
The ROLLOVER is important IF they are going to continue a move UP or DOWN to the heavy side of action. There is no point to roll over if you know liquidity to one side has dried up and the move is over.
The Volume in the contract at its peak(volume) will determine the type of counteraction to the overall trade as these bigger positions UNWIND. As smart money does, they take profit along the way , they dont just get out all at once . They exit into the traders entering late.
Because of the relatively small amount of BTC in the futures market in relation to the overall market cap of BTC, Some think that futures have no bearing on price direction of BTC. I can see both sides of the argument, but the one fact that stands out the most is that in a HIGHLY manipulated market, the BIG BOYS /SMART MONEY/HEAVY TRADERS can and will make sure their LEVERAGED positions in the futures market make it to target. Its a very small number of BIG position traders who are actually trading the most amount of BTC. (COT REPORT)
The FUTURES market doesnt control BTC, but the big players(firms, banks, funds, whales) who have huge positions that are/may be hedged with futures, have the capacity to work together to run the market to levels for profit . Why do you think you see markets TURN at just the right time with the right FUD. What happens when a trade gets crowded to one side and theres no liquidity to go higher or lower? Do you think everyone just decides to get out and reverse positions at the same time? Doesn't happen...The BIG BOYS turn the market at will.
So to get a better understand of futures and slightly possible direction you need to take into account the volume coming into the contracts and which month while paying attention to market structure and the type of positions being taken by what type of trader in the COT report.
But understand that Not every expiration is going to bring a tradeable event. If the futures data lines up with your own analysis to the possible direction, then that is complementary to your trade and you now have another piece of the puzzle.
Komentarz:
medium.com/@anthonym...ing-for-28005f3eb3f5