@@projectfinance Chris, you have a heart of gold. Thanks so much for all your videos. I am encouraged and inspired to learn options, because of the ease of understanding through your videos.
Thank you for this video. I invested a small amount in BITO without doing the research. I have heard other's opinions which reflect the same sediment. Needless to say I sold after one day and escaped unscathed.
You can still make money in the futures ETF as long as BTC goes up consistently, but you will suffer during prolonged periods of stagnating BTC price with futures contracts above the BTC price.
Thanks for taking up your time to explain all of this to us. I have a question so I hope you see it here and can reply. Why when I open a Bull Vertical Spread - bought a call in the money at 70 /sold a call out of the money at 80 (stock price at 75), does the two positions work against each other. If the one side goes up the other side goes negative. Is that because of the Extrinsic value? Will it even out over time? After 2 days I was up 400 on one side then the other side was negative 465.
Yes, the two positions work against each other. Your long call is bullish and your short call is bearish. You will always see a gain on one and a loss on the other (ideally more gain than loss)! Those two options together make a bullish call vertical spread (also named a call debit spread). Your max profit is anything above 80 and max loss is anything below 70. Your breakeven price (at expiration) would be 70 plus the net premium paid to open the spread. Hope this helps!
Hello why are you not making videos showing in the platform, how to do verticals. You are very knowledgeable about it ,? But doing in the platform will be more understandable, if you can using thinkorswing will be very good ? Thanks
I think it comes down to regulation in regards to BTC futures. Futures based ETFs are useful when it's difficult to hold the actual asset itself. For instance, a spot oil ETF would need to hold physical barrels of oil. Holding futures contracts which are entirely digital is much easier, but comes with downsides as seen in this video.
That's asset price inflation (bitcoin price), not cost of stuff inflation. Bitcoin's supply can't go above 21 million. Therefore, as more money flows into bitcoin, each BTC gets more valuable because the world's money can only fit into 21 million coins (each coin divisible into 100 million units like 1 USD = 100 pennies). Fiat currency supply is unlimited. The printing of money is the inflation you're referring to, which causes each unit to devalue and therefore prices of things denominated in that currency go up. As BTC appreciates, the cost of goods denominated in BTC goes down. Your money buys more, not less, over time.
In a way, they do. Option prices decay towards intrinsic value over time. A futures contract decays towards the spot price over time. If the futures contract is at $65,000 and the spot price of the asset is $60,000, the futures contract will decay to $60,000 by the time of its settlement date. A futures contract with no more future is equal to the spot asset.
I don't really see any other than if you CANNOT buy BTC any other way. Other than that, it's bad because you're exposed to the futures decay and you're also eliminating the potential to use BTC as money in the future. For instance, what happens if BTC becomes legal tender (currency) in the USA in the future, allowing holders to spend it without realizing a taxable gain? BTC holders with profits would benefit immensely from this. Bitcoin futures ETF holders wouldn't get any benefit from this because owning a Bitcoin ETF isn't owning the real thing. You can't use it. It's like owning GLD, the Gold ETF. You participate in the gains/losses of gold, but you can't use it as currency if you wanted to (not saying you would want to, just illustrating a point).
But ....sorry...you mentioned multiple times - if the spot asset price does not move....really ? do you expect bitcoin price not to move compare with the futures ? I am not saying you are not right, just that this explanation seems a bit under the assumption of a non volatile asset, which is not the case at all as we all know....
It's to illustrate the point. If you listened to the whole video, I mentioned in the final scenario that bitcoiners anticipate the price to increase a lot over the long-term, so it's not going to be the dreaded flat asset, decaying futures scenario I outlined first.
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Good to see you Chris
Thank you so much for learning us guys
Thx! Nicely put up -
Well explained.
pretty sweet, good to know. Was thinking about selling bi weekly CCs or CSPs on this
Yup! the same reasons why I didn't go for it when it was coming out.
Thanks Chris
I try to do what you are teaching me
Chris do you have a favorite futures contracts explainer video? Something similar to your 3 hour options video.
Not yet, but I'll make one!
@@projectfinance Chris, you have a heart of gold. Thanks so much for all your videos. I am encouraged and inspired to learn options, because of the ease of understanding through your videos.
Great video. Very informative. Can it be used for hedging, say buy some OTM puts?
Yes, of course!
Thank you for this video. I invested a small amount in BITO without doing the research. I have heard other's opinions which reflect the same sediment. Needless to say I sold after one day and escaped unscathed.
i did the same thing :) entered without research, escaped with a tiny scratch
You can still make money in the futures ETF as long as BTC goes up consistently, but you will suffer during prolonged periods of stagnating BTC price with futures contracts above the BTC price.
Thanks for taking up your time to explain all of this to us. I have a question so I hope you see it here and can reply. Why when I open a Bull Vertical Spread - bought a call in the money at 70 /sold a call out of the money at 80 (stock price at 75), does the two positions work against each other. If the one side goes up the other side goes negative. Is that because of the Extrinsic value? Will it even out over time? After 2 days I was up 400 on one side then the other side was negative 465.
Yes, the two positions work against each other. Your long call is bullish and your short call is bearish. You will always see a gain on one and a loss on the other (ideally more gain than loss)! Those two options together make a bullish call vertical spread (also named a call debit spread). Your max profit is anything above 80 and max loss is anything below 70. Your breakeven price (at expiration) would be 70 plus the net premium paid to open the spread.
Hope this helps!
Hello why are you not making videos showing in the platform, how to do verticals. You are very knowledgeable about it ,? But doing in the platform will be more understandable, if you can using thinkorswing will be very good ? Thanks
Sir , bitcoin option available ?
What is the point of a futures based etf then? Some leverage? Does it move faster percentage wise than Bitcoin if the price moves?
I think it comes down to regulation in regards to BTC futures. Futures based ETFs are useful when it's difficult to hold the actual asset itself. For instance, a spot oil ETF would need to hold physical barrels of oil. Holding futures contracts which are entirely digital is much easier, but comes with downsides as seen in this video.
Thank you. Just one thing: if fixed amount of Bitcoin and increasing demand isn't that inflation (exactly what Bitcoin was created to avoid)?
That's asset price inflation (bitcoin price), not cost of stuff inflation.
Bitcoin's supply can't go above 21 million. Therefore, as more money flows into bitcoin, each BTC gets more valuable because the world's money can only fit into 21 million coins (each coin divisible into 100 million units like 1 USD = 100 pennies).
Fiat currency supply is unlimited. The printing of money is the inflation you're referring to, which causes each unit to devalue and therefore prices of things denominated in that currency go up.
As BTC appreciates, the cost of goods denominated in BTC goes down. Your money buys more, not less, over time.
@@projectfinance Okay, thanks
During the bullish trend, it's also possible that it becomes backwardation, instead of contango.
That's correct. It will be interesting to see how the futures curve changes during a big move to the upside.
How hard would it be to go long bitcoin and short BITO to harvest the decay of the futures?
It would be better to do that with spot BTC and BTC futures and not use the ETF at all.
How can I purchase your S&P 500 course? Can I have the link? Thanks
It's not for sale
Future contacts don’t have time decay similar to options.
In a way, they do. Option prices decay towards intrinsic value over time.
A futures contract decays towards the spot price over time.
If the futures contract is at $65,000 and the spot price of the asset is $60,000, the futures contract will decay to $60,000 by the time of its settlement date. A futures contract with no more future is equal to the spot asset.
BTF is the second Bitcoin futures ETF. GBTC holds real bitcoins.
truth
Any upside to this etf?
I don't really see any other than if you CANNOT buy BTC any other way.
Other than that, it's bad because you're exposed to the futures decay and you're also eliminating the potential to use BTC as money in the future.
For instance, what happens if BTC becomes legal tender (currency) in the USA in the future, allowing holders to spend it without realizing a taxable gain? BTC holders with profits would benefit immensely from this.
Bitcoin futures ETF holders wouldn't get any benefit from this because owning a Bitcoin ETF isn't owning the real thing. You can't use it.
It's like owning GLD, the Gold ETF. You participate in the gains/losses of gold, but you can't use it as currency if you wanted to (not saying you would want to, just illustrating a point).
@@projectfinance makes sense. Thanks.
But ....sorry...you mentioned multiple times - if the spot asset price does not move....really ? do you expect bitcoin price not to move compare with the futures ? I am not saying you are not right, just that this explanation seems a bit under the assumption of a non volatile asset, which is not the case at all as we all know....
It's to illustrate the point. If you listened to the whole video, I mentioned in the final scenario that bitcoiners anticipate the price to increase a lot over the long-term, so it's not going to be the dreaded flat asset, decaying futures scenario I outlined first.
2 month count down until the biggest pump and dump of worthless garbage ends in december
Bitcoin?