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blakdawg | 8 years ago
The underlying asset is 1 or 5 bitcoins, depending on the exchange where the future is traded. (CBOE and CME, respectively.)
A traditional futures contract obligates the parties to carry out the exchange/transfer at the agreed upon price - this is distinct from an option, which gives one party the right to transact at a given price, and the counterparty the obligation to transact at that price, if the first party elects to exercise their option.
There's a lot of detail on the CBOE BTC futures available at http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures/co...
Since the CBOE BTC futures are apparently settled in cash, that means that holders of the futures won't get an actual BTC, they'll get USD equivalent to the settlement price. So someone who paid $17,000 for a BTC future whose value on the settlement date was $11,000 would receive a deposit of $11,000 USD. And if someone paid $11,000 for a BTC future contract, and BTC was worth $17,000 when the settlement amount was determined, that person would get a deposit in the amount of $17,000.
I don't know how CBOE is handling this internally - but it's possible (likely?) that the people who are actually selling the futures (e.g., agreeing to deliver a USD amount equivalent to the value of 1 BTC on a date in the future) are purchasing BTC on the open market at the time the future is sold; and they're selling the BTC on the open market on the settlement date (perhaps a little before or after) so they will have the cash to meet their obligation to deliver USD equivalent to the settlement price.
So my hunch is that it means that there's a little extra selling happening on settlement days - but it looks like the volume of contracts (1,907 on January 9, per the article) is small enough that it shouldn't be moving the market a lot. That's roughly 21 million USD compared to a daily average trade volume of about 9 billion USD.
justboxing|8 years ago