A Bitcoin futures contract is exactly what you would expect from the example above, replacing pork bellies with Bitcoin. It is a contract that enables you to buy Bitcoin at a predetermined price at a specific point in the future. For example, if today’s Bitcoin price is 8,000 USD per BTC and you expect it to rise to 10,000 USD per BTC in 4 weeks, then entering a contract which allows you to buy Bitcoin at 9,000 USD in 4 weeks is highly attractive.
Under a Rule 12b-1 Distribution Plan (the “Plan”) adopted by the Board, each Fund may pay its distributor and financial intermediaries, such as broker-dealers and investment advisors, up to 0.25% on an annualized basis of the average daily net assets of a Fund as reimbursement or compensation for distribution related activities with respect to the Funds. Because these fees are paid out of each Fund’s assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. For the prior fiscal year, no payments were made by the fund under the Plan.
Subject to the general supervision by the Board, the Advisor is responsible for decisions to buy and sell securities and derivatives for each of the Funds and the selection of brokers and dealers to effect transactions. Purchases from dealers serving as market makers may include a dealer’s mark-up or reflect a dealer’s mark-down. Purchases and sales of U.S. government securities are normally transacted through issuers, underwriters or major dealers in U.S. government securities acting as principals. Such transactions, along with other fixed income securities transactions, are made on a net basis and do not typically involve payment of brokerage commissions. The cost of securities purchased from an underwriter usually includes a commission paid by the issuer to the underwriters; transactions with dealers normally reflect the spread between bid and asked prices; and transactions involving baskets of equity securities typically include brokerage commissions. As an alternative to directly purchasing securities, the Advisor may find efficiencies and cost savings by purchasing futures or using other derivative instruments like total return swaps or forward contracts. The Advisor may also choose to cross -trade securities between clients to save costs where allowed under applicable law.
It is not an endorsement of the firms listed, and no significance should be attached to a firm's inclusion or omission. CFE has not investigated the background or disciplinary history of any of the firms listed or of any individual broker in connection with providing this list. The selection of an FCM, broker, or clearing firm involves matters of personal preference. In choosing a firm, an investor should ask questions and take into account such factors as the investor individually regards as important.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.FUTURESONLINE.COM AT THE BOTTOM OF THE HOMEPAGE. FUTURESONLINE IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. FUTURESONLINE DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICES.
through direct investments/short positions in the securities and/or through investments with similar economic characteristics. For the purposes of each such investment policy, “assets” includes a Fund’s net assets, as well as amounts borrowed for investment purposes, if any. In addition, for purposes of such an investment policy, “assets” includes not only the amount of a Fund’s net assets attributable to investments providing direct investment exposure to the type of investments suggested by its name (e.g., the value of stocks, or the value of derivative instruments such as futures, options or options on futures), but also cash and cash equivalents that are segregated on the Fund’s books and records or being used as collateral, as required by applicable regulatory guidance, or otherwise available to cover such investment exposure. The Board has adopted a policy to provide investors with at least 60 days’ notice prior to changes in a Fund’s name policy.
Daily access to the PCF and IOPV file is permitted (i) to certain personnel of those service providers that are involved in portfolio management and providing administrative, operational, or other support to portfolio management, including Authorized Participants, and (ii) to other personnel of the Advisor and the Funds’ distributor, administrator, custodian and fund accountant who are involved in functions which may require such information to conduct business in the ordinary course.
It is also possible that other digital currencies, typically referred to as “alt-coins”, and trading systems could become more widely accepted and used than Bitcoin. In particular, the digital asset “ethereum” has acquired a substantial share of the cryptocurrency market in recent months, which may be in part due to perceived institutional backing and/or potentially advantageous features not incorporated into bitcoin. There are other cryptocurrencies gaining momentum as the price of the bitcoin continues to rise and investors see the cheaper cryptocurrencies as attractive alternatives. The continued rise of these alt-coins can lead to a reduction in demand for bitcoin, which could have an adverse effect on the price of bitcoin and may have an adverse impact on the performance of Bitcoin Instruments and the performance of the Funds.
Futures markets create an immense amount of flexibility. They enable investors to readily bet on an asset or bet against it (go long or go short), and they are usually characterised by an immense amount of leverage. In the case of bitcoin, this means one can trade a high volume of coins while only paying for a fraction of them, essentially operating with borrowed money. Leverage is used to amplify profits on a small volume of assets, but it is a double-edged sword in that it also amplifies losses.
• Tax Risk — In order to qualify for the special tax treatment accorded a regulated investment company (“RIC”) and its shareholders, the Fund must derive at least 90% of its gross income for each taxable year from “qualifying income,” meet certain asset diversification tests at the end of each taxable quarter, and meet annual distribution requirements. The Fund’s pursuit of its investment strategies will potentially be limited by the Fund’s intention to qualify for such treatment and could adversely affect the Fund’s ability to so qualify. The Fund can make certain investments, the treatment of which for these purposes is unclear. If, in any year, the Fund were to fail to qualify for the special tax treatment accorded a RIC and its shareholders, and were ineligible to or were not to cure such failure, the Fund would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level. The resulting taxes could substantially reduce the Fund’s net assets and the amount of income available for distribution. In addition, in order to requalify for taxation as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions.
This means simply that you put down 1 bitcoin and you can trade 20 on OKCoin, or 100 bitcoin on BitMEX. The multiple refers to the initial margin you need to open the nominal position value. You simply set the margin aside as collateral, and if the position goes against you, the collateral will be used to exit your position into a liquidation, or margin call.
Now, what if the Bitcoin price is rising? For example, if 1 BTC is worth 5,500 USD, you don’t want to fulfill this contract any more and sell cheap for 5,000 USD. In order to still make things fair for both participants, the exchange (here CME) will make sure that you can sell for the current market price of 5,500 USD if you so wish, but they will compensate your contract partner for this. How? They will take the difference – 500 USD – out of your so-called margin account and give it to Mortimer. This kind of settlement is not only performed on the fulfilment date of the futures contract, but on every trading day, according to the current price of the asset.
A Fund may cover its sale of a call option on a futures contract by taking a long position in the underlying futures contract at a price less than or equal to the strike price of the call option, or, if the long position in the underlying futures contract is established at a price greater than the strike price of the written (sold) call, the Fund will earmark/segregate liquid instruments equal in value to the difference between the strike price of the call and the price of the future. A Fund may also cover its sale of a call option by taking positions in instruments whose prices are expected to move relatively consistently with the call option. A Fund may cover its sale of a put option on a futures contract by taking a short position in the underlying futures contract at a price greater than or equal to the strike price of the put option, or, if the short position in the underlying futures contract is established at a price less than the strike price of the written put, the Fund will segregate cash or liquid instruments equal in value to the difference between the strike price of the put and the price of the future. A Fund may also cover its sale of a put option by taking positions in instruments whose prices are expected to move relatively consistently to the put option.
There are so many hoops to jump through to set up for mining and each coin has its quirks. The power of your machine and graphix card and your power consumption are all important. My friend mined for 8month Eth and only made couple of hundred bucks by time you subtract power useage etc. He already had a powerful machine used in film industry for video graphix just sitting around so he thought he’d put it to use over that time for a laugh and see what happened. It took many hours messing around to set up and occassionally nursing it over that period. Of course he had to use his machine also occassionally which compromised the performance.
As we have seen above, a futures contract has an expiration date. This is the date on which you can purchase the ton of pork bellies for 1,000 USD – this is called a physical settlement. Alternatively, futures contracts can be settled with cash as well. In these contracts, you receive the difference between the current price of the underlying asset and the price in your contract as cash.
interest, taxes, dividends (including dividend expenses on securities sold short), litigation, indemnification, expenses associated with investment in other funds as permitted by the then current registration statement, and extraordinary expenses as determined under generally accepted accounting principles) to the extent total annual Fund operating expenses, as a percentage of average daily net assets, exceed 0.95% through September 30, 2018 (0.30% for the Inflation Expectations ETF, 0.60% for the Global Listed Private Equity ETF, 0.50% for the Short Term USD Emerging Markets Bond ETF and the CDS Short North American HY Credit ETF, and 0.75% for the Merger ETF each through September 30, 2018. ProShare Advisors, on behalf of the Morningstar Alternatives Solution ETF, has contractually agreed to waive investment advisory and management services fees and to reimburse other expenses (exclusive of transaction costs, interest, taxes, dividends (including dividend expenses on securities sold short), litigation, indemnification, expenses associated with investment in other funds as permitted by the then current registration statement, and extraordinary expenses as determined under generally accepted accounting principles but inclusive of acquired fund fees and expenses) to the extent total annual Fund operating expenses, as a percentage of average daily net assets, exceed 0.95% through September 30, 2018. After such date, the expense limitation may be terminated or revised by ProShare Advisors. Amounts waived or reimbursed in a particular contractual period may be recouped by ProShare Advisors within five years of the end of that contractual period, however, such recoupment will be limited to the lesser of any expense limitation in place at the time of recoupment or the expense limitation in place at the time of waiver or reimbursement.
ProShare Advisors, located at 7501 Wisconsin Avenue, Suite 1000E, Bethesda, Maryland 20814, serves as the investment adviser to the fund and provides investment advice and management services to each Fund. ProShare Advisors oversees the investment and reinvestment of the assets in each Fund. Pursuant to the Investment Advisory and Management Agreement between ProShare Advisors and the Trust (entered into on behalf of each Fund), ProShare Advisors is responsible for substantially all expenses of the Fund, except interest expenses, taxes, brokerage and other transaction costs, compensation and expenses of the Independent Trustees, compensation and expenses of counsel to the Independent Trustees, compensation and expenses of the Trust’s chief compliance officer and his or her staff, future distribution fees or expenses, and extraordinary expenses. For its investment advisory and management services, ProShares Bitcoin Futures Strategy ETF pays ProShare Advisors a fee at an annualized rate of % of average daily net assets of the Fund; ProShares Short Bitcoin Futures Strategy ETF pays ProShare Advisors a fee at an annualized rate of % of average daily net assets of the Fund; ProShares Bitcoin Futures/Equity Strategy ETF pays ProShare Advisors a fee at an annualized rate of % of average daily net assets of the Fund; and ProShares Bitcoin/Blockchain Strategy ETF pays ProShare Advisors a fee at an annualized rate of % of average daily net assets of the Fund. A discussion regarding the basis for the Board approving the investment advisory and management agreement for each Fund will be included in the Trust’s semi-annual or annual report to shareholders that covers the period during which the approval occurred.
In traditional financial markets, derivatives are used as speculation objects as well as insurance against losses. The latter is known as hedging. One popular variety of derivatives used for hedging are called futures. A future is a contract between two parties in which one party agrees to pay the other a predetermined amount of money for an underlying asset at a specific point in time.