expect that the futures exchanges, through information sharing agreements, will be monitoring the trading activity on the relevant cash platforms for potential impacts on the futures contracts’ price discovery process, including potential market manipulation and market dislocations due to flash rallies and crashes and trading outages. Nevertheless, investors should be aware of the potentially high level of volatility and risk in trading these contracts . . . it is incumbent on market participants to conduct appropriate due diligence to determine the particular appropriateness of these products, which at times have exhibited extreme volatility and unique risks.”
• Compounding Risk — In the course of managing the Fund’s investments, ProShare Advisors will need to periodically adjust the Fund’s holdings in order to maintain investment exposure approximately equivalent to the Fund’s assets. This process entails obtaining additional inverse exposure as the Fund experiences gains, and reducing inverse exposure as the Fund experiences losses. The higher the volatility of the bitcoin futures contracts in which the Fund invests, the more such rebalancing can adversely affect the Fund’s performance.
Consistent with a client’s investment objective, the Advisor may enter into guarantee close agreements with certain brokers. In all such cases, the agreement calls for the execution price at least to match the closing price of the security. In some cases, depending upon the circumstances, the broker may obtain a price that is better than the closing price and which under the agreement provides additional benefits to clients. The Advisor will generally distribute such benefits pro rata to applicable client trades.
Elsewhere, here is the story of block.one, which "has raised about $700 million and counting" by selling EOS tokens that it says "do not have any rights, uses, purpose, attributes, functionalities or features." Block.one is using the money to build "a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications," as its white paper explains, and the white paper also includes a disclaimer in bold capitals:
Traders A and B in the previous example are hedgers. However, futures contracts, once they exist, can also be bought and sold in their own right. This is where futures get interesting for speculators. Say that Speculator X believes the price of a ton of pork belly will rise to 1,200 USD in 3 months’ time, so buying the futures contract at 1,000 USD is a good deal. He can then sell the contract to bacon producers who want to buy pork bellies at 1,000 USD. The option to buy at a specified price in the future is known as a call option. The price of call options rise when traders assume that the price of the underlying asset will rise.
(a) derive in each taxable year at least 90% of its gross income from (i) dividends, interest, payments with respect to certain securities loans and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to, gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (ii) net income derived from interests in “qualified publicly traded partnerships” as described below (the income described in this subparagraph (a), “Qualifying Income”);
ZagTrader platform is probably the only platform known that has a complete turnkey offering for Crypto trading that covers front ends all the way to the accounting, custody and allocations -- all integrated and under one roof. Add to this, the global markets offering along with the algos, market making, and real-time structured products creation and pricing.
In February 2014 the world's largest bitcoin exchange, Mt. Gox, declared bankruptcy. The company stated that it had lost nearly $473 million of their customers' bitcoins likely due to theft. This was equivalent to approximately 750,000 bitcoins, or about 7% of all the bitcoins in existence. The price of a bitcoin fell from a high of about $1,160 in December to under $400 in February.
The Fund is an actively managed exchange traded fund. The Fund seeks to achieve its investment objective by investing substantially all of its assets in a combination of (i) the equity securities of blockchain technology companies, (ii) bitcoin futures, options and swap contracts that provide exposure to the price movements of bitcoin (“Bitcoin Derivatives”) and (iii) bitcoin related securities, such as bitcoin linked exchange traded notes (“ETNs”), funds and trusts (“Bitcoin Securities”) (collectively, with Bitcoin Securities, “Bitcoin Investments”). The Fund targets a minimum of 30% exposure to Bitcoin Investments. The Fund’s other assets will be invested in the equity securities of blockchain technology companies — companies that the Fund’s investment advisor determines are well-positioned to benefit from blockchain technology. The securities of blockchain technology companies may be listed on U.S. or non-U.S. exchanges and must meet certain minimum capitalization and liquidity requirements. The Fund intends to concentrate its investment in blockchain technology companies and/or technology companies.
Ziddu Coin is a smart contract that enables SME’s, processors, manufacturers, importers and exporters using cryptocurrencies across continents. Ziddu Coins are loosely pegged to Ethereum and Bitcoin. The importers/exporters convert offered Ziddu coins into Ethereum or Bitcoin and use the proceeds for their working capital needs. At the end of the contract, importers/exporters will realize their proceeds and pay back their funds through cryptocurrencies only. Depending upon the risk profile of the counterparty, the interest will vary from 12% to 48%.
Cboe Futures Exchange, LLC (CFE) launched trading in Cboe bitcoin futures at 5:00 p.m. Central Time on December 10 under the ticker symbol "XBT". XBT℠ futures are cash-settled contracts based on the Gemini's auction price for bitcoin, denominated in U.S. dollars. Gemini Trust Company, LLC (Gemini) is a digital asset exchange and custodian founded in 2014 that allows customers to buy, sell, and store digital assets such as bitcoin, and is subject to fiduciary obligations, capital reserve requirements, and banking compliance standards of the New York State Department of Financial Services.3
SEI Investments Distribution Co. (“SEI”) serves as the distributor and principal underwriter in all fifty states and the District of Columbia. SEI is located at One Freedom Valley Drive, Oaks, PA 19456. The Distributor has no role in determining the investment policies of the Trust or any of the Funds, or which securities are to be purchased or sold by the Trust or any of the Funds. For the fiscal years ended May 31, 2015, May 31, 2016 and May 31, 2017, ProShare Advisors paid $1,858,542, $787,325, and $769,839 respectively, to the Distributor as compensation for services.
• Intellectual property rights claims may adversely affect the operation of the Bitcoin Network. Third parties may assert intellectual property rights claims relating to the operation of the Bitcoin Network. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the Bitcoin Network’s long-term viability or the ability of end-users to hold and transfer bitcoin may adversely affect the price of bitcoin and adversely affect the price of the Bitcoin Futures Contracts held by the Fund.
ProShares Morningstar Alternatives Solution ETF is not sponsored, endorsed, sold or promoted by Morningstar, Inc. Morningstar makes no representation or warranty, express or implied, to the owners of ProShares Morningstar Alternatives Solution ETF or any member of the public regarding the advisability of investing in securities generally or in ProShares Morningstar Alternatives Solution ETF in particular or the ability of Morningstar® Diversified Alternatives IndexSM to track general stock market performance. Morningstar’s only relationship to ProShares Trust is the licensing of: (i) certain service marks and service names of Morningstar; and (ii) the Morningstar® Diversified Alternatives IndexSM which is determined, composed and calculated by Morningstar without regard to ProShares Trust or ProShares Morningstar Alternatives Solution ETF. Morningstar has no obligation to take the needs of ProShares Trust or the owners of ProShares Morningstar Alternatives Solution ETF into consideration in determining, composing or calculating the Morningstar® Diversified Alternatives IndexSM. Morningstar is not responsible for and has not participated in the determination of the prices and amount of the Morningstar® Diversified Alternatives IndexSM or the timing of the issuance or sale of ProShares Morningstar Alternatives Solution ETF or in the determination or calculation of the equation by which ProShares Morningstar Alternatives Solution ETF is converted into cash. Morningstar has no obligation or liability in connection with the administration, marketing or trading of ProShares Morningstar Alternatives Solution ETF. MORNINGSTAR, INC. DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE PROSHARES MORNINGSTAR ALTERNATIVES SOLUTION ETF OR ANY DATA INCLUDED THEREIN AND MORNINGSTAR SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. MORNINGSTAR MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY PROSHARES TRUST, OWNERS OR USERS OF THE PROSHARES MORNINGSTAR ALTERNATIVES SOLUTION ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE PROSHARES MORNINGSTAR ALTERNATIVES SOLUTION ETF OR ANY DATA INCLUDED THEREIN. MORNINGSTAR MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE FUND OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MORNINGSTAR HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
ProShare Advisors is also responsible for the general management and administration of each Subsidiary, pursuant to separate investment advisory and management agreements. Under those advisory and management agreements, ProShare Advisors provides each Subsidiary with the same type of services under essentially the same terms (except at no cost to such Subsidiary) as are provided for its respective Parent Fund.
Market makers are challenged in fast markets—when either buyers or sellers are dominating and prices are moving rapidly. When this happens market makers are obligated to continue quoting bid and ask prices that maintain some semblance of an orderly market. If they start accumulating uncomfortably large net long or short inventories they may start hedging their positions to protect themselves. For example, if they are short Bitcoin futures they can buy Bitcoin futures with different expirations or directly buy Bitcoins to hedge their positions. The hedged portion of the market maker’s portfolio is not sensitive to Bitcoin price movements—their profit/losses on the short side are offset by their long positions.
A futures contract is a technique to hedge positions and reduce the risk of the unknown. It is also used for arbitrating between current spot and future contracts. In the case of bitcoins, futures have been more associated with miners who face the risk of unknown future prices. OrderBook.net (formerly iCBIT), a futures marketplace operating since 2011, sells millions of futures contracts each month. The standard contract size (or tick size) is $10. A typical instrument would look like this: BTC/USD-3.14. Here "BTC/USD" signifies the rate of exchange between Bitcoin and US dollar, "3" means the month of March, and "14" signifies the year 2014. The trading symbol for the same instrument will be BUH4. Each month has a trading symbol like March is H (as per Chicago Mercantile Exchange), the "B" is taken from BTC and the "U" from USD, and "4" signifies the year.
In contrast, if you are “going short” on Bitcoin, you assume that Bitcoin prices will fall. Buying put options will enable you to sell Bitcoin at some point in the future at a price that is higher than the future price you expect. In analogy to the example above, if the current Bitcoin price is 5,000 USD and you expect it to fall to 2,000 USD in 6 months, then put options allowing you to sell Bitcoin for 5,000 USD in 5 months (when everyone else is selling for 2000 USD) are very valuable.
The Trust and the fund have obtained an exemptive order from the SEC allowing a registered investment company to invest in the Fund’s shares beyond the limits of Section 12(d)(1) subject to certain conditions, including that a registered investment company enters into a Participation Agreement with the Trust regarding the terms of the investment. Any investment company considering purchasing shares of the Fund in amounts that would cause it to exceed the restrictions of Section 12(d)(1) should contact the Trust.
Disclaimer: I am not a professional (or even a veteran) trader. I am an intermediate trader with a passion for cryptocurrency. I am disclosing my own ventures in crypto because cryptocurrency trading does make up a chunk of my online income and I want to be 100% transparent with you when it comes to making money online. Investing in cryptocurrencies carries a risk – you may lose some or all of your investment. Always do your own research and draw your own conclusions. Again – this article is aimed purely at advising; draw your own conclusions on whether cryptocurrency trading is right for you.
The use of swaps is a highly specialized activity which involves investment techniques and risks in addition to, and in some cases different from, those associated with ordinary portfolio securities transactions. The primary risks associated with the use of swap agreements are mispricing or improper valuation, imperfect correlation between movements in the notional amount and the price of the underlying investments, and the inability of the counterparties or clearing organization to perform. If a counterparty’s creditworthiness for an over-the-counter swap declines, the value of the swap would likely decline. Moreover, there is no guarantee that a Fund could eliminate its exposure under an outstanding swap agreement by entering into an offsetting swap agreement with the same or another party. In addition, a Fund may use a combination of swaps on an underlying index and swaps on an ETF that is designed to track the performance of that index. The performance of an ETF may not track the performance of its underlying index due to embedded costs
Ann then goes on BFE and she wants to short on bitcoin at market price. She sees that only the January 9 contract has any orders. She could put a limit order in the orderbook if she wanted. However, she sees Bob's bid in the orderbook and decides to fill it, and uses her 0.2btc as margin to collateralize this position. She has just opened a position worth 1 bitcoin that has 5x leverage, and so has Bob.
Describe any other business, profession, vocation or employment of a substantial nature in which the investment adviser and each director, officer or partner of the investment adviser, or has been, engaged within the last two fiscal years for his or her own account or in the capacity of director, officer, employee, partner or trustee (disclose the name and principal business address of any company for which a person listed above serves in the capacity of director, officer, employee, partner or trustee, and the nature of the relationship.)
On December 1, 2017, the CFTC issued a statement concerning the launch of bitcoin futures contracts on three CFTC-regulated futures exchanges – the CME, the CFE and the Cantor Exchange, cautioning that “market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. There are concerns about the price volatility and trading practices of participants in these markets. We
No Independent Trustee (or an immediate family member thereof) had any direct or indirect interest, the value of which exceeded $120,000, in the Advisor, the principal underwriter of the Trust, or any entity controlling, controlled by or under common control with the Advisor or the principal underwriter of the Trust (not including registered investment companies) during the two most recently completed calendar years.
Ultimately, the big and yet unanswered question will continue to loom: is bitcoin indeed the millennials’ gold, as strategist Tom Lee suggests, and therefore has real and measurable value, or is it simply used for speculation as investors like Jack Bogle and Warren Buffet have implied? The answer that important investors will come up with for that question should have a significant impact on the price movement of bitcoin, and it is completely uncertain what it will look like.
Coinbase, headquartered in San Francisco, is an online bitcoin broking exchange which caters to US, Canada, Europe, UK, Australia, Singapore. Up to 150 US dollars and pounds can be bought on Coinbase on a daily basis. It charges a 3.99% on all the exchanges via credit or debit card. Coinbase offers very high limits. Limits depend on your account level, which is determined by how much information you have verified. Fully verified U.S. customers may buy up to $50,000 worth of bitcoin daily.
Now, if that margin-call does not get filled and the price continues to fall, then I'm making profits on my contract but nobody is paying for it since the counterparty who got margin-called didn't get the liquidation order filled. So what happens is that at settlement time of the contract, that unfilled liquidation loss to the system will be deducted from the profits of ALL traders before they are distributed.
When the market for certain futures contracts is such that the prices are higher in the more distant delivery months than in the nearer delivery months, the sale during the course of the “rolling process” of the more nearby bitcoin futures contracts would take place at a price that is lower than the price of the more distant bitcoin futures contracts. This pattern of higher futures prices for longer expiration bitcoin futures contracts is often referred to as “contango.” Alternatively, when the market for certain bitcoin futures contracts is such that the prices are higher in the nearer months than in the more distant months, the sale during the course of the “rolling process” of the more nearby bitcoin futures contracts would take place at a price that is higher than the price of the more distant bitcoin futures contracts. This pattern of higher future prices for shorter expiration bitcoin futures contracts is referred to as “backwardation.”
The Declaration of Trust of the Trust disclaims liability of the shareholders or the Officers of the Trust for acts or obligations of the Trust which are binding only on the assets and property of the Trust. The Declaration of Trust provides for indemnification of the Trust’s property for all loss and expense of any Funds shareholder held personally liable for the obligations of the Trust. The risk of a Trust shareholder incurring financial loss on account of shareholder liability is limited to circumstances where the Funds would not be able to meet the Trust’s obligations and this risk, thus, should be considered remote.
Neither ProShares Trust nor ProShares Ultra 7-10 Year Treasury, ProShares Short 7-10 Year Treasury, ProShares UltraShort 7-10 Year Treasury, ProShares Ultra 20+ Year Treasury, ProShares Short 20+ Year Treasury, ProShares UltraShort 20+ Year Treasury, or ProShares UltraPro Short 20+ Year Treasury is sponsored, endorsed, sold or promoted by Interactive Data. Interactive Data makes no representations or warranties regarding ProShares Trust or, ProShares Ultra 7-10 Year Treasury, ProShares Short 7-10 Year Treasury, ProShares UltraShort 7-10 Year Treasury, ProShares Ultra 20+ Year Treasury, ProShares Short 20+ Year Treasury, ProShares UltraShort 20+ Year Treasury, or ProShares UltraPro Short 20+ Year Treasury or the ability of, ProShares Ultra 7-10 Year Treasury, ProShares Short 7-10 Year Treasury, ProShares UltraShort 7-10 Year Treasury, ProShares Ultra 20+ Year Treasury, ProShares Short 20+ Year Treasury, ProShares UltraShort 20+ Year Treasury, or ProShares UltraPro Short 20+ Year Treasury to track the applicable Index.
Each Fund, except for S&P 500 Dividend Aristocrats ETF, S&P MidCap 400 Dividend Aristocrats ETF, Russell 2000 Dividend Growers ETF, MSCI EAFE Dividend Growers ETF, MSCI Europe Dividend Growers ETF, MSCI Emerging Markets Dividend Growers ETF, Morningstar Alternatives Solution ETF, Long Online/Short Stores, DJ Brookfield Global Infrastructure ETF, Global Listed Private Equity ETF, Large Cap Core Plus, S&P 500 Ex-Energy ETF, S&P 500 Ex-Financials ETF, S&P 500 Ex-Health Care ETF, S&P 500 Ex-Technology ETF, Equities for Rising Rates ETF, High Yield—Interest Rate Hedged, Investment Grade—Interest Rate Hedged, Short Term USD Emerging Markets Bond ETF, Hedge Replication ETF, Merger ETF, RAFI® Long/Short, and Inflation Expectations ETF (each, a “Matching ProShares Fund” and collectively, the “Matching ProShares Funds” or “Matching Funds”), Managed Futures Strategy ETF, Crude Oil Strategy ETF, CDS Short North American HY Credit ETF, Bitcoin Futures Strategy ETF, Blockchain/Bitcoin Strategy ETF, Bitcoin Futures/Equity Strategy ETF, and Short Bitcoin Futures Strategy ETF is “Geared” in the sense that each is designed to seek daily investment results, before fees and expenses, that correspond to the performance of a daily benchmark such as the inverse (-1x), multiple (i.e., 2x or 3x), or inverse multiple (i.e., -2x or -3x) of the daily performance of an index for a single day, not for any other period (for purposes of this SAI, the term “index” includes
When you display any broker’s profile page on the CME list above, you will see on the right hand side this broker’s specialties (a list of industries and/or financial products). As of this articles publication (Nov. 24, 2017), only one broker has added Bitcoin to his list of specialties: Level Trading Field LLC. However, this does not mean that the other brokers won’t handle Bitcoin futures. We expect that more of them will adopt this specialty as soon as Bitcoin futures are on the market.