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Author Topic: Best way to profit from BTC going up is with FUTURES!  (Read 802 times)
integrity42
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November 02, 2013, 11:52:30 PM
 #1

So, you think bitcoin is going to $500?

On a regular exchange, you can't profit from the price going up without depositing some FIAT and buying more BTC... The BTC balance you have in your account is useless, because the exchange doesn't give you leverage.

That's why you should use FUTURES contracts to bet on the price of BTC increasing.

At ICBIT.se, you can buy November, December, or March contracts with BTC.  I think you currently get around 4:1 leverage. So you can buy 100BTC worth of contracts with only 25BTC.  If that position rises 25%, you will double your original BTC balance.

They currently have 0% trading fees for the next two weeks.
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There are several different types of Bitcoin clients. EWallets are like banks -- a central organization has complete control over your money. You shouldn't put much money in EWallets.
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theonewhowaskazu
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November 03, 2013, 01:02:13 AM
 #2

Why not just take BTC, sell a future on ICBIT, use the proceeds of that sale, to buy another BTC? And keep on doing that? You'll never get a margin call, since the BTC will float with your future.

integrity42
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November 03, 2013, 01:20:11 AM
 #3

Futures are't options. You don't have any proceeds to withdraw and buy another BTC with until the prices drops and you cover your short.

But yes, you can certainly use it to short.   Also keep in mind you are leveraged. If the price moves against you, you'll lose your position.
iammagicmike
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November 03, 2013, 10:58:42 PM
 #4

I hate to sound like a total nard-dawg, but I don't really understand futures.  I kind of want to play along, but I literally do not know what a futures contract is or how to use it. 

It's only after we've lost everything that we're free to do anything.

LTC: LPGSryKuT2BaEcDBg6VWHwusXj5N8ynu3M
theonewhowaskazu
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November 04, 2013, 12:11:01 AM
 #5

I hate to sound like a total nard-dawg, but I don't really understand futures.  I kind of want to play along, but I literally do not know what a futures contract is or how to use it.  

A future is just an IOU on something other than USD, only its traditionally sold for USD (or other fiat currency).

Basically:

IOU: "You give me $1 now I'll give you $1 + $interest in the future."
Future: "You give me $1 - $interest now and I'll give you $1 worth of Bitcoin in the future."

The funky bit? On ICBIT, due to weirdness & volatility of Bitcoin, its in constant backwardation ($interest is negative assuming the current Bitcoin price). In other words, it only makes sense to own those futures if you think Bitcoin is going to go up wildly.

integrity42
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December 13, 2013, 12:15:54 PM
 #6

contango, not backwardation.
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