Bitcoin is a relatively new type of currency—a digital or cryptocurrency secured through cryptography, or codes that can’t be read without a key. Traditional currencies are made up of paper bills and coins. Unlike traditional currencies, the bitcoin is not issued by any central government. Rather, a computer algorithm determines how many bitcoins are produced and added to the economy. This is much different than a traditional currency, where central banks typically determine how much money to print.
It bears repeating -- when trading futures on leverage, you are not "borrowing" the money, so you don't have to pay a financing rate on your positions. Even though you are 100x exposed, you don't have to pay 100x financing (unless you're trading the perpetual swap, which is not a futures contract, but has similar characteristics). Since bitcoin futures do tend to trade at a premium, you are in a way paying an implied interest rate in the contract, because if you want to go long, you have to pay above spot, so you pay the interest up front in the contract, in a way.
Bitcoin has a very limited history of operations and there is no established performance record for the price of Bitcoin on the Bitcoin Exchange Market that can provide an adequate basis for evaluating an investment in bitcoin or Bitcoin Instruments such as Bitcoin Derivatives, ETNs and Bitcoin Securities. Although past performance is not necessarily indicative of future results, if bitcoin had an established history, such history might (or might not) provide investors with more information on which to evaluate an investment in the Funds.
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Although forward currency contracts may be used by the Funds to try to manage currency exchange risks, unanticipated changes in currency exchange rates could result in poorer performance than if a Fund had not entered into these transactions. Even if the Advisor correctly predicts currency exchange rate movements, a hedge could be unsuccessful if changes in the value of a Fund’s position do not correspond to changes in the value of the currency in which its investments are denominated. This lack of correlation between a Fund’s forwards and currency positions may be caused by differences between the futures and currency markets.

participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with the Fund’s shares as part of an “unsold allotment” within the meaning of Section 4(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(3) of the Securities Act.

Words of caution are appropriate when talking about going short and using leverage. These strategies are incredibly effective because they allow investors to not only profit from a general upward trend in bitcoin but to profit from the fluctuations in the market. At first, it is hard to think of a more perfect asset than bitcoin for such purposes. The upward trends have been fast and extreme, yet fluctuations are very common and tend to be substantial.
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.
The Board has approved a Distribution and Service Plan under which each Fund may pay financial intermediaries such as broker-dealers and investment advisers (“Authorized Firms”) up to 0.25%, on an annualized basis, of average daily net assets of the Fund as reimbursement or compensation for distribution-related activities with respect to the Shares of the Fund and shareholder services. Under the Distribution and Service Plan, the Trust or the Distributor may enter into agreements (“Distribution and Service Agreements”) with Authorized Firms that purchase Shares on behalf of their clients.
participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with the Fund’s shares as part of an “unsold allotment” within the meaning of Section 4(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(3) of the Securities Act.
CCC – An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

As of September 16, 2017, the Trustees and officers of the Trust, as a group, owned outstanding shares that entitled them to give voting instructions with respect to less than one percent of the shares of any series of the Trust; except that Mr. Michael L. Sapir owned more than 25% of the outstanding shares of ProShares S&P 500 Ex-Financials ETF and ProShares S&P 500 Ex-Health Care ETF.


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.

Bitcoin (BTC) has been engaged in a predictable up and down pattern where it absolutely crashes at the beginning of any year and then sky-rockets as the year nears its end. Bitcoin held steady at around $19,000 in December 2017, and then sure enough – crashed big time to around $6,000 at the beginning of 2018. At the time of writing, March 8th 2018, the price of Bitcoin is relatively stable between $10,000 and $12,000. In my opinion, the price will run again soon.
Disclaimer: This is a personally owned web site, reflecting the opinions of its author(s). It is unaffiliated with any FINRA broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion & entertainment purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities. DATA INFORMATION IS PROVIDED TO THE USERS "AS IS." NEITHER BitcoinFuturesGuide.COM, NOR ITS AFFILIATES, NOR ANY THIRD PARTY DATA PROVIDER MAKE ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND REGARDING THE DATA INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.Copyright BitcoinFutursGuide, BTCFutures 2015-2016
Futures contracts derive their value from an asset and more or less follow the movements of the underlying commodity, in our case: bitcoin. They ultimately settle at price of the commodity in the future on a particular exchange, or an index that represents a basket of prices at different exchanges.  So if you have a weekly future's contract and you don't want to sell out of it on the market,  then it will expire at the price at a specific time when Friday comes and if you want to maintain your position you must re-open on the new contract period. In the weekly example, if a contract is issued at April 14, 2017, it dies on April 21, 2017. If you buy the contract at a price of $1,100 and you don't sell it for the whole week, and the price ends on April 21 at $1,200, then you profit.
Each Fund may invest in real estate investment trusts (“REITs”). Equity REITs invest primarily in real property, while mortgage REITs invest in construction, development and long-term mortgage loans. Their value may be affected by changes in the value of the underlying property of the REIT, the creditworthiness of the issuer, property taxes, interest rates, and tax and regulatory requirements, such as those relating to the environment. REITs are dependent upon management skill, are not diversified and are subject to heavy cash flow dependency, default by borrowers, self-liquidation and the possibility of failing to qualify for tax-free pass-through of income under the Code and failing to maintain exempt status under the 1940 Act.
  •   Ownership of bitcoin is pseudonymous and the supply of accessible bitcoins is unknown. There is no registry showing which individuals or entities own bitcoin or the quantity of bitcoin that is owned by any particular person or entity. It is possible, that a small group of early bitcoin adopters hold a significant proportion of the bitcoin that has been thus far created. There are no regulations in place that would prevent a large holder of bitcoin from selling its bitcoins, which could depress the price of bitcoin and have an adverse effect on an investment in the Fund.
The tax rules are uncertain with respect to the treatment of income or gains arising in respect of commodity-linked exchange-traded notes (“ETNs”) and certain commodity-linked structured notes; also, the timing and character of income or gains arising from ETNs can be uncertain. An adverse determination or future guidance by the IRS (which determination or guidance could be retroactive) may affect a Fund’s ability to qualify for treatment as a regulated investment company and to avoid a Fund-level tax.
Moody’s ratings for state and municipal notes and other short-term loans are designated Moody’s Investment Grade (MIG) and for variable rate demand obligations are designated Variable Moody’s Investment Grade (VMIG). This distinction recognizes the differences between short-term credit risk and long-term risk. Loans bearing the designation MIG-1/VMIG-1 are of the best quality, enjoying strong protection from established cash flows of funds for their servicing or from established and broad-based access to the market for refinancing, or both. Loans bearing/with the designation MIG-2/VMIG-2 are of high quality, with ample margins of protection, although not as large as the preceding group.

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:
•	 	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.

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.
In addition, the Advisor, its affiliates and principals may trade for their own accounts. Consequently, non-customer and proprietary trades may be executed and cleared through any prime broker or other broker utilized by clients. It is possible that officers or employees of the Advisor may buy or sell securities or other instruments that the Advisor has recommended to, or purchased for, its clients and may engage in transactions for their own accounts in a manner that is inconsistent with the Advisor’s recommendations to a client. Personal securities transactions by employees may raise potential conflicts of interest when such persons trade in a security that is owned by, or considered for purchase or sale for, a client. The Advisor has adopted policies and procedures designed to detect and prevent such conflicts of interest and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty to its clients and in accordance with applicable law.

Portfolio holdings information may not be provided prior to its public availability (“Non-Standard Disclosure”) in other circumstances except where appropriate confidentiality arrangements limiting the use of such information are in effect. Non-Standard Disclosure may be authorized by the Trust’s CCO or, in his absence, any other authorized officer of the Trust if he determines that such disclosure is in the best interests of the Fund’s shareholders, no conflict exists between the interests of the Fund’s shareholders and those of the Advisor or Distributor and such disclosure serves a legitimate business purpose, and measures discussed in the previous paragraph regarding confidentiality are satisfied. The lag time between the date of the information and the date on which the information is disclosed shall be determined by the officer authorizing the disclosure. The CCO is responsible for ensuring that portfolio holdings disclosures are made in accordance with this Policy.
Assume it is January 3, 2015. Bob and Ann both want to trade at Bitcoin Futures Exchange (BFE). BFE offers 3 different contracts: one expiring and settling on Friday January 9 ('weekly'), another expiring Friday January 16th ('biweekly'), and finally one expiring in March 27 ('quarterly').  Each contract is worth 1 bitcoin notionally.  BFE has a policy that traders have to put 20% of margin down to enter a trade, so Bob and Ann deposit 0.2btc to their BFE accounts as they only want to trade 1 contract.

U.S.-listed bitcoin futures contracts may aid institutional investor participation and enable hedging while also potentially helping digital assets develop into an asset class of their own. Currently digital assets trade on platforms that lack proper execution mechanisms, governance, and standard financial industry practices. Futures contracts push trading volume towards regulated exchanges with proper governance, controls and state of the art execution mechanisms. Futures contracts also remove the arduous requirement for investors to custody “physical” bitcoin, which is a major obstacle. In some ways, bitcoin futures are an early attempt to integrate digital assets into the mainframe financial system. With such integration, regulators might also gain a greater understanding of and steadier grasp on digital assets. This may enable the creation of more explicit guidance and regulation around the space. While it is early innings for digital assets, U.S.-listed bitcoin futures may pave the way for a potentially safer, more reliable, and better governed digital asset space and regulated investment vehicles.
Bitcoin has a very limited history of operations and there is no established performance record for the price of Bitcoin on the Bitcoin Exchange Market that can provide an adequate basis for evaluating an investment in bitcoin or Bitcoin Instruments such as Bitcoin Derivatives, ETNs and Bitcoin Securities. Although past performance is not necessarily indicative of future results, if bitcoin had an established history, such history might (or might not) provide investors with more information on which to evaluate an investment in the Funds.

Matthew Roszak, one of block.one’s early investors, said EOS holders shouldn’t worry too much about the warnings the company has given about the tokens. “I don’t think it’s fair reading into that language too tightly,” he said. Given the “regulatory environment is as clear as mud,” he said block.one needed to write something to provide the broadest protection possible.

•   Short Sale Exposure Risk — The Fund seeks inverse or “short” exposure through short positions in bitcoin futures contracts and other financial instruments. This will cause the Fund to be exposed to certain risks associated with selling assets short. These risks include, under certain market conditions, an increase in the volatility and decrease in the liquidity of the asset underlying the short position, which may lower the Fund’s return, result in a loss, have the effect of limiting the Fund’s ability to obtain inverse exposure through financial instruments such as swap agreements and futures contracts, or require the Fund to seek inverse exposure through alternative investment strategies that may be less desirable or more costly to implement. To the extent that, at any particular point in time, the assets underlying the short position may be thinly traded or have a limited market, including due to regulatory action, the Fund may be unable to meet its investment objective due to a lack of available securities or counterparties. During such periods, the Fund’s ability to issue additional Creation Units may be adversely affected. Obtaining inverse exposure through these instruments may be considered an aggressive investment technique. Inverse exposure must be actively managed in order to keep the Fund fully invested. See “Compounding Risk” above for an explanation of how this impacts performance
A bitcoin exchange operates somewhat similarly to online stock trading brokers, where customers deposit their fiat currency (or bitcoins) to carry out trades. However, not all bitcoin exchanges offer such services. Some exchanges are more like wallets and thus provide limited trading options or storage of currency (both digital and fiat) for trading. The bigger and more elaborate exchanges offer trades between different cryptocurrencies, as well as between digital and fiat currencies. The number of currencies supported by an exchange varies from one exchange to another. (For more, see: Why Is Bitcoin’s Value So Volatile.)
Typically exchanging is done through matching the buy and sell orders placed on the system of the exchange. The sell orders are made at an offer price (or ask) while the buy order (or bid) is made to buy bitcoins. It is similar to buying stocks online where you need to enter the desired price (or market price) for buy/sell along with the quantity. These orders enter the order book and are removed once the exchange transaction is complete.
Leverage (All Funds, except the Matching ProShares Funds, the Managed Futures Strategy ETF, the Crude Oil Strategy ETF, the Bitcoin Futures Strategy ETF, the Short Bitcoin Futures Strategy ETF, the Blockchain/Bitcoin Strategy ETF, and the Bitcoin Futures/Equity Strategy ETF the Short (-1x) ProShares Funds and the CDS Short North American HY Credit ETF)

Crypto Facilities and the CME Group  have been calculating and publishing the Bitcoin Reference Rate (BRR) since November 2016. Such an official rate is a prerequisite of options trading in the traditional markets. The BRR is calculated based on the rates from the biggest exchanges: Bitstamp, GDAX, itBit, and Kraken. More concretely, it is calculated based on all Bitcoin vs. USD trades on the participating exchanges between 3 and 4 p.m. London time. To calculate the BRR, the hour between 3 and 4 is divided into 12 intervals of 5 minutes. For each interval, the volume-weighted median of the Bitcoin price is calculated (statistically, the median, in contrast to the average, prevents single outliers from distorting the price). The BRR is then the average of these 12 median values. More details about the calculation of the BRR can be found in the BRR whitepaper.

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