Transaction fees payable to the Trust are imposed to compensate the Trust for the transfer and other transaction costs of a Fund associated with the issuance and redemption of Creation Units of Shares. A fixed Transaction Fee is applicable to each creation or redemption transaction, regardless of the number of Creation Units purchased or redeemed. In addition, a variable Transaction Fee equal to a percentage of the value of each Creation Unit purchased or redeemed may be applicable to a creation or redemption transaction. Purchasers of Creation Units of the Matching and Ultra ProShares Funds for cash may also be required to pay an additional charge to compensate the relevant Fund for brokerage, market impact or other expenses. Where the Trust permits an in-kind purchaser to substitute cash in lieu of depositing a portion of the Deposit Securities, the purchaser will be assessed an additional charge for cash purchases. The maximum Transaction Fee on purchases and redemptions will be 2.00% of the NAV of any Creation Unit, except that for the High Yield—Interest Rate Hedged, the Investment Grade—Interest Rate Hedged and the Short Term USD Emerging Markets Bond ETF, a Transaction Fee up to 3.00% will be charged on the cash used in lieu of depositing all or a portion of the Deposit Securities or the cash portion of any redemption transaction. The Transaction Fees charged to each Fund are presented in the Authorized Participant Handbook.
Each Independent Trustee is paid a $185,000 annual retainer for service as Trustee on the Board and for service as Trustee for other funds in the Fund Complex, $10,000 for attendance at each quarterly in-person meeting of the Board of Trustees, $3,000 for attendance at each special meeting of the Board of Trustees, and $3,000 for attendance at telephonic meetings. Trustees who are also Officers or affiliated persons receive no remuneration from the Trust for their services as Trustees. The Officers, other than the CCO, receive no compensation directly from the Trust for performing the duties of their offices.
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.
By now you may ask yourself, “If I think that the price of an asset is going to rise, why should I buy a call option and not the asset itself?” The answer is this: Options give you leverage. That means that with a limited amount of capital, you can profit much more by buying options than assets – but also lose much more. This is because a small difference in the price of the underlying asset immediately leads to a substantial change in the price of the derivative. For example, when pork belly prices rise from 1,000 USD to 1,100 USD (an increase of 10%), call options for 1,000 USD suddenly become much more valuable – their prices may rise from 10.5 USD to 105 USD. Thus, if you have invested all of your capital in pork bellies, you will win 10% – if you have invested in pork belly call options, you will pocket a 1,000% profit.
The CFTC, in conjunction with other federal regulators, also recently proposed stricter margin requirements for certain swap transactions. If adopted, the proposed requirements could increase the amount of margin necessary to conduct many swap transactions, limit the types of assets that can be used as collateral for such transactions, and impose other restrictions. The rule proposal may affect the ability of the Funds to use swap agreements (as well as futures contracts and options on futures contracts or commodities) and may substantially increase regulatory compliance costs for the Advisor and the Funds. As of the date of this SAI, the ultimate impact of the rule proposal on the Funds is uncertain. It is possible, however, that any adopted rule may adversely affect the Advisor’s ability to manage the Funds, may impair a Funds’ ability to achieve its investment objective and/or may result in reduced returns to Fund investors.

THIS MATERIAL HAS BEEN PREPARED BY A FUTURESONLINE BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES. FUTURESONLINE, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.


 	•	 	Developmental risk. Blockchain technology is not a product or service within an individually attributable revenue stream. Blockchain technology may never develop optimized transactional processes that lead to realized economic returns for any company in which the Fund invests. Blockchain Companies that are developing applications of blockchain technology applications may not in fact do so or may not be able to capitalize on those blockchain technologies. The development of new or competing platforms may cause consumers and investors to use alternatives to blockchains.

Here you will learn more broad concepts regarding daytrading bitcoin and futures in general. Even if you are not an active trader, there's a lot to learn about markets and how they're structured in this guide.  Some of the early sections may be a little too easy for those of you who already are traders, so just navigate through to the part that is most relevant to you if you want to hit a more advanced topic in the guide.
Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker or from The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606. The information on this website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the website information. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. The inclusion of non-Cboe advertisements on the website should not be construed as an endorsement or an indication of the value of any product, service, or website. The Terms and Conditions govern use of this website and use of this website will be deemed acceptance of those Terms and Conditions.

Exchanges simply take a fee to facilitate the orderbook where its clients (the counterparties) create and trade futures contract with each other. They also have to manage the system's risk so that traders don't get overleveraged or manipulate the market. Since counterparties are only putting margin down that is a % of the contract value, the exchange also has to handle liquidation procedures in case the value of the margin is exceeded by the loss on the notional market value of the contract. For instance, BitMEX offers 100x leverage, so if you want to enter a $10,000 position you need to put down $100 worth of bitcoin. If the price moves just 0.5% against your favor, BitMEX will take over your position and execute it into the market, so that the person on the other side of the contract can have someone else who pays for the profit. In the event that the liquidation doesn't get passed off to another trader, an Auto-Deleveraging/Termination can occur, or Socialize Loss in the contract builds (we will discuss these issues in more detail later).


The digital investment expert and CEO of BKCM LLC, Brian Kelly believes that the Bitcoin rally has started and the market is at the initial stage of a long bull run. The reason for this is told to be the Bitcoin ETF, which rumored to come in the month of August. Of late, this has been the talk of the Bitcoin town and impacted the market on a huge level.

In 1983 the American cryptographer David Chaum conceived an anonymous cryptographic electronic money called ecash.[9][10] Later, in 1995, he implemented it through Digicash,[11] an early form of cryptographic electronic payments which required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by the issuing bank, the government, or a third party.


The Funds may purchase and write options on indexes to create investment exposure consistent with their investment objectives, to hedge or limit the exposure of their positions, or to create synthetic money market positions. An index fluctuates with changes in the market values of the assets included in the index. Options on indexes give the holder the right to receive an amount of cash upon exercise of the option. Receipt of this cash amount will depend upon the closing level of the index upon which the option is based being greater than (in the case of a call) or less than (in the case of a put) the level at which the exercise price of the option is set. The amount of cash received, if any, will be the difference between the closing price level of the index and the exercise price of the option, multiplied by a specified dollar multiple. The writer (seller) of the option is obligated, in return for the premiums received from the purchaser of the option, to make delivery of this amount to the purchaser. All settlements of index options transactions are in cash.
The CME Group contract (symbol "BTC") began trading on December 18, 2017, building off of the success of the BRR and demand for a regulated trading venue for the digital asset market. The contract is cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Bitcoin futures are listed on and subject to the rules of CME.2

  •   Swap Agreements are agreements entered into primarily with major global financial institutions for a specified period ranging from a day to more than one year. In a standard “swap” transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined investments or instruments.
ProShare Advisors, from its own resources, including profits from advisory fees received from the Funds, also may make payments to broker-dealers and other financial institutions for their services and expenses incurred in connection with the distribution and promotion of the Funds’ Shares. In this regard, the Advisor or an affiliate of the Advisor, may directly or indirectly make cash payments to certain broker-dealers for participating in activities that are designed to make registered representatives and other professionals more knowledgeable about exchange traded products, including the Funds, or for other activities, such as participation in marketing activities and presentations, educational training programs, conferences, the development of technology platforms and
If you are “going long” on Bitcoin, you assume that Bitcoin prices will go up. And if you expect Bitcoin prices to go up, you are interested in buying call options – options that enable you to buy Bitcoin at a predetermined price in the future. For example, if the current Bitcoin price is 5,000 USD and you expect it to rise to 8,000 USD 6 months from now, you would certainly pay good money for a call option that allows you to purchase Bitcoin for 5000 USD in 6 months, when everyone else is buying for 8,000 USD.

This mega-powerful currency has not only opened the gate for other currencies, but also leads the cryptocurrency world with pride. It is governed to make sure no extra Bitcoin is produced, as a maximum quantity of 21 Million Bitcoin units was agreed to. When introduced, the rate was $1 to 1,309 BTC. The wheel has turned, and when Bitcoin reached the all-time high of $19,783.21 in 2017, it was certainly a meaningful milestone for Satoshi Nakamoto, the creator of Bitcoin.


The Funds subject to the SEC “names rule” (Rule 35d-1 under the 1940 Act) have adopted non-fundamental investment policies obligating them to commit, under normal market conditions, at least 80% of their assets exposed to the types of securities suggested by their name and/or investments with similar economic characteristics. Such direct or inverse exposure may be obtained


When the Fund has an open futures contract position, it is subject to daily variation margin calls that could be substantial in the event of adverse price movements. If the Fund has insufficient cash to meet daily variation margin requirements, it might need to sell securities at a time when such sales are disadvantageous. Futures markets are highly volatile and the use of or exposure to futures contracts may increase volatility of the Fund’s NAV. Futures contracts are also subject to liquidity risk.
If you are doing any active trading, set stop losses. For any coins not in your medium or long-term holds, always set stop losses. This is important for several reasons — the most obvious is mitigating your losses. But more importantly, you force yourself to decide on a point of acceptable loss, and because you now have a reference point, you are able to measure your effectiveness to keep or adjust for future trades. Sometimes, during a market dip, altcoins can plummet, and stop losses can lead to profitability by automatically selling for fiat that you can use to re-enter at lower prices.

  (c) A “Disinterested Trustee” is one (i) who is not an Interested Person of the Trust (including anyone, as such Disinterested Trustees, who has been exempted from being an Interested Person by any rule, regulation or order of the Commission), and (ii) against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending;
Each Fund may provide redemptions in portfolio securities or cash at the Advisor’s discretion. With respect to the Matching and Ultra ProShares Funds, the Index Receipt Agent makes available through the NSCC immediately prior to the opening of business on the Exchange on each day that the Exchange is open for business the portfolio securities that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as defined below) on that day (“Fund Securities”). These securities, at times, may not be identical to Deposit Securities which are applicable to a purchase of Creation Units. The Fund may also, in its sole discretion, upon request of a shareholder, provide such redeeming shareholder a portfolio of securities which differs from the exact composition of the Fund Securities but does not differ in NAV.
As an example: if you have Quarterlies contracts that you made profits on over the weekend, then this profit needs to be withheld because of the risk of socialised losses. By Friday, however, this profit is available to be withdrawn and the positions are all rebalanced. Technically this is not a "settlement", because if you are holding an open Quarterlies contract when the weekly settlement occurs, your position will remain open, it will just experience a step-up in cost-basis and the unrealised Pnl is applied, so that socialised losses can be handled.
As noted above under “Distributions”, a Fund may declare a distribution from net realized capital gains to be payable in additional Fund shares or cash. Even if the Fund does not declare a distribution to be payable in Fund shares, brokers may make available to their customers who own shares the DTC book-entry dividend reinvestment service. If this service is available and used, dividend distributions of both income and capital gains will automatically be reinvested in additional whole shares of the same Fund. Without this service, investors would have to take their distributions in cash. To determine whether the dividend reinvestment service is available and whether there is a commission or other charge for using this service, please consult your broker.

INTERACTIVE DATA MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ICE U.S. 7-10 YEAR BOND INDEX™ and ICE U.S. 20+ YEAR BOND INDEX™ OR ANY DATA INCLUDED THEREIN. IN NO EVENT SHALL INTERACTIVE DATA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.


Were Centra's tokens securities? Well, yes, obviously. We talked last week about the Securities and Exchange Commission's enforcement action against Munchee, an initial coin offering vaguely similar to Centra's in that it featured "utility tokens" to be used in a blockchain ecosystem that did not yet exist, sold on promises of speculative returns. The SEC brusquely and correctly dismissed the notion that such "utility tokens" were not securities, and I suspect any court will agree. Also, while Centra occasionally remembered to call its tokens "utility-based tokens" and "not securities, shares or investments," it often forgot. From the complaint:
Currently, Bitcoin futures have very high margin requirements. The Cboe requires 40% of the notional amount for maintenance margin, the CME requires 43%. Your broker will likely require more than that. The culprit behind these high requirements is Bitcoin’s high volatility—until that calms down the exchanges will protect themselves by requiring a bunch of up-front money. If you don’t come up with the money for a margin call they want to close out your position without leaving a negative balance.

•   Active Management Risk — The performance of actively managed funds reflects, in part, the ability of ProShare Advisors to select investments and make investment decisions that are suited to achieving the Fund’s investment objective. ProShare Advisors’ judgments about the Fund’s investments may prove to be incorrect. If the investments selected and strategies employed by ProShare Advisors fail to produce the intended results, the Fund may not achieve its investment objective and could underperform other funds with a similar investment objective and/or strategies.
•   Subsidiary Investment Risk — Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Fund to operate as intended and could negatively affect the Fund and its shareholders. The Subsidiary is not registered under the 1940 Act and is not subject to all the investor protections of the 1940 Act. Thus, the Fund, as an investor in the Subsidiary, will not have all the protections offered to investors in registered investment companies.
The regulation of bitcoin, digital assets and related products and services continues to evolve. The inconsistent and sometimes conflicting regulatory landscape may make it more difficult for bitcoin businesses to provide services, which may impede the growth of the bitcoin economy and have an adverse effect on consumer adoption of bitcoin. There is a possibility of future regulatory change altering, perhaps to a material extent, the nature of an investment in the Funds or the ability of the Funds to continue to operate. Additionally, to the extent that bitcoin itself is determined to be a security, commodity future or other regulated asset, or to the extent that a United States or foreign government or quasi-governmental agency exerts regulatory authority over the Bitcoin Network, bitcoin trading or ownership in bitcoin, the price of bitcoin and the value of the Bitcoin Instruments may be adversely affected, which may have an adverse effect on the value of your investment in the Funds. In sum, bitcoin regulation takes many different forms and will, therefore, impact bitcoin and its usage in a variety of manners. The European Union has recently agreed to rules designed to reduce anonymity of bitcoin transactions, which may impact the supply and demand for bitcoin and bitcoin futures contracts.
When you are getting started making actual trades, in general you should focus on making LIMIT ORDERS which will get FILLED by other traders. Not only will you pay lower fees this way, but you will also be making more composed trading setups because you aren't impatiently just market-buying or market-selling into the spread. So a general principle you should follow is to AVOID MARKET ORDERS WHEN YOU CAN! You will pay higher "taker" fees and you will be at the mercy of the spread which is a hidden fee.
Transaction fees payable to the Trust are imposed to compensate the Trust for the transfer and other transaction costs of a Fund associated with the issuance and redemption of Creation Units of Shares. A fixed Transaction Fee is applicable to each creation or redemption transaction, regardless of the number of Creation Units purchased or redeemed. In addition, a variable Transaction Fee equal to a percentage of the value of each Creation Unit purchased or redeemed may be applicable to a creation or redemption transaction. Purchasers of Creation Units of the Matching and Ultra ProShares Funds for cash may also be required to pay an additional charge to compensate the relevant Fund for brokerage, market impact or other expenses. Where the Trust permits an in-kind purchaser to substitute cash in lieu of depositing a portion of the Deposit Securities, the purchaser will be assessed an additional charge for cash purchases. The maximum Transaction Fee on purchases and redemptions will be 2.00% of the NAV of any Creation Unit, except that for the High Yield—Interest Rate Hedged, the Investment Grade—Interest Rate Hedged and the Short Term USD Emerging Markets Bond ETF, a Transaction Fee up to 3.00% will be charged on the cash used in lieu of depositing all or a portion of the Deposit Securities or the cash portion of any redemption transaction. The Transaction Fees charged to each Fund are presented in the Authorized Participant Handbook.
The investment restrictions of the Funds specifically identified as fundamental policies may not be changed without the affirmative vote of at least a majority of the outstanding voting securities of that Fund, as defined in the 1940 Act. The investment objectives and all other investment policies of the Funds not specified as fundamental (including the index of a Fund) may be changed by the Board without the approval of shareholders.
Start small. Get familiar with the platform you're using before you make any significant trades. BitMEX offers a sandbox using Testnet coins. OKCoin and BitVC do not offer a demo version, but you can start small with 1 contract and test how Open Long, Open Short, Close Long, Close Short and different order types work. If you contact CryptoFacilities you can also get access to a demo platform to use.
An Authorized Participant may place an order to purchase (or redeem) Creation Units (i) through the Continuous Net Settlement clearing processes of NSCC as such processes have been enhanced to effect purchases (and redemptions) of Creation Units, such processes being referred to herein as the “Clearing Process,” or (ii) outside the Clearing Process, though orders for Global Funds (as defined below) may not be placed through the Clearing Process. In either case, a purchase order for a Fund must be received by the following cut-off times (which may be earlier if the relevant Exchange or any relevant bond market closes early). In all cases purchase/redeem procedures are at the discretion of the Advisor and may be changed without notice.
To the extent that an Underlying RIC realizes net losses on its investments for a given taxable year, a Fund that invests in the Underlying RIC will not be able to benefit from those losses until (i) the Underlying RIC realizes gains that it can reduce by those losses, or (ii) the Fund recognizes its share of those losses when it disposes of shares in the Underlying RIC. Moreover, when a Fund makes such a disposition, any loss it recognizes will be a capital loss. A Fund will not be able to offset any capital losses from its dispositions of shares of the Underlying RIC against its ordinary income (including distributions deriving from net short-term capital gains realized by the Underlying RIC). In addition, a portion of such capital loss may be long-term, which will first offset the Fund’s capital gains, increasing the likelihood that the Fund’s short-term capital gains will be distributed to shareholders as ordinary income.
​The price of the futures contract can deviate from the underlying price of bitcoin on spot markets, which can vary based on sentiment. But in the end, at expiration of the contract, the contract MUST settle at the price of spot. So you need to watch the main spot market price movements because the futures contracts will track the movements underlying (sometimes leading, sometimes lagging, sometimes simultaneously). There are three Chinese exchanges worth following: OKCoin, Houbi, and BTCC; there are two Western exchanges worth following: Bitfinex and Bitstamp. Other exchanges that are currently less important but still worth keeping an eye on are: ItBit, Coinbase, OKCoin USD, BTC-e, and Kraken (which has the largest BTC/EUR orderbook as of December 2015).
BOFA MERRILL LYNCH AND THE EXCHANGES AND ENTITIES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND BOFA MERRILL LYNCH AND THE EXCHANGES AND ENTITIES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. BOFA MERRILL LYNCH AND THE EXCHANGES AND ENTITIES MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY TRUST, OWNERS OF THE SHARES OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. BOFA MERRILL LYNCH AND THE EXCHANGES AND ENTITIES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL BOFA MERRILL LYNCH OR THE EXCHANGES AND ENTITIES HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
CryptoFacilities, Coinpit, and BitMEX has a realtime profit realisation, while OKCoin and Deribit has weekly rebalancing scheduled for all contract lengths. It's important to note that on all of these exchanges, all the futures and forwards are non-deliverable and have expiration at various times. Despite this, OKCoin uses "delivery" as their term for expiration settlement of a contract, and "settlement" for the weekly rebalancing of the Pnl for higher length contracts. Since we are stuck with this unprofessional Chinese exchange being the dominant market player in futures, we have to focus on their use of the terminology, but BitMEX and CryptoFacilities have very impressive and professional setups that use well documented procedures. Always read the documentation of any exchange you're using and the contract specifications of the individual product you're using.
The information in this Prospectus is not complete and may be changed. Shares of the Funds may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
An increase in cryptocurrency mining increased the demand of graphics cards (GPU) in 2017.[49] Popular favorites of cryptocurrency miners such as Nvidia’s GTX 1060 and GTX 1070 graphics cards, as well as AMD’s RX 570 and RX 580 GPUs, doubled or tripled in price – or were out of stock.[50] A GTX 1070 Ti which was released at a price of $450 sold for as much as $1100. Another popular card GTX 1060's 6 GB model was released at an MSRP of $250, sold for almost $500. RX 570 and RX 580 cards from AMD were out of stock for almost a year. Miners regularly buy up the entire stock of new GPU's as soon as they are available.[51]

Making money arbitraging bitcoin futures can be extremely simple. Futures contracts typically trade at a premium, and all you have to do, starting with USD, is buy bitcoin at Spot price and sell futures of the same amount at premium price. Then just wait until expiration to make your arb profit in bitcoin (which you can then put in USD). Whether it's a weekly, monthly, quarterly, or any futures contract, as long as it's in a premium, you lock in the sale price and earn the arbitrage profit.
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