Can any of you explain to me why the spread is so large in bitcoin futures vs spot? Blah blah blah counterparty risk or whatevs but even the CME futures look like an arbitrage opportunity. Is the margin call risk /really/ that high?
It’s either very capital intensive (fully collateralised spot leg and 35% margin in futures leg) or you pay expensive financing on the spot leg. Also risk of being closed out on the futures leg if Bitcoin gaps up and you can’t meet your margin call in time.
-
-
You can use spot as collateral for the futures leg plus a few extra bucks on interest given longs pay shorts in this environment. Definitely vulnerable to gapping/stickiness of spot price.
-
You cannot use spot as collateral on cme.
- Show replies
New conversation -
-
-
In Deribit, spreads can get even higher. Is not rare a get 30%~40% yearly in short term contracts.
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
This gap up on the futures side is the sole reason I haven't done this carry arb trade yet. Even though I have liquid reserves, I have this irrational fear it'll gap up 5x or some crazy scenario ... (quite unlikely but like I said irrational
)Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
Would this be solved by CME accepting BTC as collateral?
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.