[2017-11-09] Taming Bitcoin Price Swings: CME to Place Limits on Bitcoin Futures

[tyz]

Taming Bitcoin Price Swings: CME to Place Limits on Bitcoin Futures

Ahead of its planned bitcoin futures product, CME – the world’s largest exchange operator, will reportedly impose limits on bitcoin price fluctuations to avoid extreme volatility.
According to the Wall Street Journal, the CME Group will impose trading halts across different tiers of price movements and a “hard cap” to completely restrict price swings at a certain level on any day.

The first two ‘soft limit’ thresholds, as detailed by the report, will kick in at 7% and then again at 13% above or below the previous day’s settlement price to implement a ‘two-minute pause in trading’ of bitcoin futures. A complete circuit-breaker hard cap will prevent trading after price swings of over 20%, up or down, on any given day.

https://www.cryptocoinsnews.com/taming-bitcoin-price-swings-cme-place-limits-bitcoin-futures/

[1715329016]

1715329016

[1715329016]

1715329016

[1715329016]

1715329016

[1Referee]

It was to be expected. I know that institutions aren't exactly interested in actually purchasing Bitcoin and owning it, which is why they are fine with certain financial products that allows them to benefit from its massive potential, but without actually owning any. But these limits are quite ridiculous, at least in terms of how small the margins are. We've seen the market tank with 10% in a matter of a few seconds, and that's something we'll likely experience more often with old hands unloading coins from time to time. These price swings aren't only a negative aspect, but also a great opportunity for those who look to utilize Bitcoin's fluctuations. Halting trading will result in situations where entities lose out on potential profits, and that's a big no go.