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Saturday, November 18, 2017

LedgerX Bitcoin Option Pegs Price at $10,000 in One Year


LedgerX just initiated its first long-term bitcoin futures option.

Called a Long-Term Equity Anticipation Security (LEAPS), the trade was matched by the platform this morning and is set to expire on December 28, 2018.

Under the terms of the deal, the buyer has the right to buy bitcoin at a price of $10,000 at that date, or almost a 30 percent premium on today's price.

Yet, because the buyer only makes money if the price is more than $10,000 (called the strike price), the investment can be seen as a reflection of the level of confidence that the price will reach that level by the agreed upon date.

Such long term futures options have long been seen in the industry as a much needed sign of maturity, and could in part help pave the way for even more institutional money to enter the space.

In an exclusive interview with CoinDesk, LedgerX CEO Paul Chou sought to position the milestone as just the first of many more before the cryptocurrency market can truly be considered mature.

Chou said:
"There will be, I expect, a lot more trades down the line. This is the first one, but it at least gives you the first guess from different institutional traders as to what bitcoin's dynamics will look like from now until 2018."


The trade option was listed by LedgerX late Friday night, and to Chou's surprise, two institutional investors agreed to the terms of the deal just one day later.

Under the terms, the buyer agreed to a price of $2,250.25 for the trade, meaning the seller collects that money if the price is less that $10,000 by the end of next year, and the buyer gets to purchase bitcoin at the strike price if it is higher.

Unlike a futures swap however, the buyer is not obliged to purchase the asset.

"If the price goes to zero, you don't have to pay $10,000 for it," Chou said. "But if a year from now it's at $20,000, then you can exercise your options."

Based on LedgerX's own calculations (made using the Nobel-prize winning Black-Sholes financial markets model), the startup believes there is a 25 percent chance that bitcoin will reach that level in the allotted time.

Soft launch

While this is the first LEAPS financial instrument matched by New York-based LedgerX, they've been conducting increasingly high trade volumes since their soft launch a month ago.

As reported by CoinDesk, LedgerX traded $1 million in bitcoin derivatives its first week of trading, ending Oct. 20.

Since then, the first cryptocurrency firm to be granted a derivatives clearing organization (DCO) license by the CFTC has posted a $1 million day, a $1.6 million day and on November 15, a record $2.6 million day.

Since LedgerX listed the LEAPS option at 5:30 Friday evening, Chou says they saw an additional $500,000 traded before midnight. "That's for a holiday week too," he said. "So we were shocked." He estimates the company has conducted approximately $16 million in notional bitcoin transactions to date.

While the startups numbers seem to indicated active early interest, legacy institutions such as the Chicago Mercantile Exchange (CME Group) and the Chicago Board Options Exchange (CBOE) have both recently revealed their own similar plans.

Though Chou hopes to maintain his first-mover advantage, he said there's no hard date to launch into full operation. Rather, his team wants to make sure the platform scales well beyond the 1 million messages it sends per day before this milestone. He says he'd be "surprised if that takes "more than a month," concluding:

"But it might be sooner."

Source: CoinDesk

[FOREX TIP] AUDUSD Weekly Forex Forecast – 20th to 24th Nov 2017

 

AUDUSD Weekly Forex Forecast – 20th to 24th Nov 2017

The Aussie broke below the 0.7625 support level but was not able to post any significant rally above it. Only a daily close above 0.7625 can suggest that the current downside move is over and we can correct now the prevailing trend. We should quickly run into resistance level at 0.7730 from where a reaction lower should be expected. The stochastic indicator is already in oversold territory but this can also suggest that any rally is just another opportunity to sell with the trend. Now, the big round number 0.7500 should hold the downside but at the same time we can’t expect any significant rally either.

The Australian economic calendar has scheduled some risk events that can be the catalyst for some volatility. On Tuesday we have the RBA Meeting Minutes which can give traders further clues into the interest rates policy and what is the most appropriate time for the RBA to hike rates. Next, we have Governor Philip Lowe speech that can move AUDUSD exchange rate.

Previous AUDUSD Weekly Forex Forecast

AUDUSD Weekly Forex Forecast – 20th to 24th Nov 2017

The post AUDUSD Weekly Forex Forecast – 20th to 24th Nov 2017 appeared first on Advanced Forex Strategies.



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[FOREX TIP] GBPUSD Weekly Forex Forecast – 20th to 24th Nov 2017

 

GBPUSD Weekly Forex Forecast – 20th to 24th Nov 2017

The GBPUSD is trading in a very frustrating range between support level 1.3030 but, more importantly the big psychological level 1.3000 and resistance level 1.3350. As long as the price is contained between these two levels we should expect more of the same from the cable’s price action. The stochastic indicator is moving away from overbought territory but we still have room to continue upwards and retest the resistance level. Only a break and a daily close above 1.3350 can suggest that current correction is over. The base case scenario still suggests that GBP/USD is more prone to find a reaction lower from 1.3350 and possibly se again a retest of the big round number 1.3000.

The UK economic calendar will bring early in the week the Inflation Report Hearings scheduled on Monday. Next on the calendar we have the UK GDP figures for the Q3 which based on the market consensus we should expect a flat reading of 0.4%. The annualized GDP growth rate is expected to come flat at 1.5%.

Previous GBPUSD Weekly Forex Forecast

GBPUSD Weekly Forex Forecast – 20th to 24th Nov 2017

The post GBPUSD Weekly Forex Forecast – 20th to 24th Nov 2017 appeared first on Advanced Forex Strategies.



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[FOREX TIP] USDCHF Weekly Forex Forecast – 20th to 24th Nov 2017

USDCHF Weekly Forex Forecast – 20th to 24th Nov 2017

Technical Outlook: The USDCHF currency pair slipped back to the support level area of 0.9894 – 0.9861. The retracement back to this level indicates near term gains that could build up on a bullish momentum. Resistance at 1.0088 could be seen as the next target to the upside. However, the currency pair runs the risk of a break down near the current support level. In such a scenario, a close below the support level could see USDCHF slipping towards the next main level at 0.9741 which could be tested for support. To the upside, the gains are likely to be limited near 1.0088. However, with the Stochastics oscillator posting a bullish hidden divergence, we expect the bias to the upside.

Fundamental Outlook: Switzerland’s trade balance figures are the only economic release coming up this week. On the other hand, data from the U.S. is comparatively busier. Data includes the durable goods orders figures coming out on Wednesday. This is followed by the FOMC meeting minutes from the meeting held earlier in November. No surprises are expected as the Fed did not change rates in November while it continued with its balance sheet unwinding. Still, the release of the FOMC meeting minutes could bring some volatility to the U.S. dollar. The week concludes with Friday’s release of flash manufacturing and services PMI from Markit.

Previous USDCHF Weekly Forex Forecast

USDCHF Weekly Forex Forecast – 20th to 24th Nov 2017

The post USDCHF Weekly Forex Forecast – 20th to 24th Nov 2017 appeared first on Advanced Forex Strategies.



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[FOREX TIP] USDJPY Weekly Forex Forecast – 20th to 24th Nov 2017

USDJPY Weekly Forex Forecast – 20th to 24th Nov 2017

Technical Outlook: The USDJPY currency pair posted declines last week after price action continuously failed to break past the 114.50 level of resistance. The breakdown of the rising trend line saw the U.S. dollar slipping towards 113.00 support level. This support offered little help as USDJPY extended declines below this level. Further downside can be expected with 111.76 coming in as the next level of support. Any short term retracements ahead of the decline to 111.76 will likely see more sellers entering the market. The bias will only shift direction on a breakout above 113.00 which looks unlikely for now.

Fundamental Outlook: Economic data from Japan is quiet with the exception of the all industries activity and th flash manufacturing PMI due later in the week on Friday. The Japanese yen is unlikely to be moved much by the data this week leaving most of the heavy lifting to the technical aspect of things. Last week’s speeches from BoJ Governor Kuroda saw the central bank maintaining its commitment towards its QE program. This is expected to continue until inflation starts to show signs of progress. The lack of macroeconomic details could see the Japanese yen continue to trade flat as a result.

Previous USDJPY Weekly Forex Forecast

USDJPY Weekly Forex Forecast – 20th to 24th Nov 2017

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[FOREX TIP] EURUSD Weekly Forex Forecast – 20th to 24th Nov 2017

EURUSD Weekly Forex Forecast – 20th to 24th Nov 2017

Technical Outlook: EURUSD posted strong gains last week as price action invalidated the bearish flag pattern and reversed losses. Breaking past the short term resistance level of 1.1691, EURUSD managed to quickly recover to reclaim the 1.1800 handle. The rally lasted as the currency pair briefly touched the main resistance level near 1.1850 before easing back promptly. We expect that in the near term, the consolidation will continue as EURUSD could be seen moving in a range within 1.1850 and 1.1700 levels. However, watch for the potential bullish flag pattern that could be validated when EURUSD breaks past the 1.1850 resistance level. This will put the currency pair on path to post further stronger gains.

Fundamental Outlook: The week ahead is relatively quiet as far as data from the Eurozone is concerned. We will get to see the flash manufacturing and services PMI which will offer a preliminary glimpse into the economy at an early stage. However, with economic activity in the Eurozone forecast to pickup momentum, we do not see any major deviations to both the manufacturing and the service PMI levels. Germany’s final GDP figures for the third quarter will be published and no major changes are expected. The German central bank will releasing its monthly report that could offer some insights into the economic activity in the region.

Previous EURUSD Weekly Forex Forecast

EURUSD Weekly Forex Forecast – 20th to 24th Nov 2017

The post EURUSD Weekly Forex Forecast – 20th to 24th Nov 2017 appeared first on Advanced Forex Strategies.



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[FOREX TIP] Weekly Forex News Events for EURUSD – 20th to 24th Nov 2017

EURUSD finished the week with strong Bullish tone. The next week will be an interesting week since some high impact news events are to take place. Let us have a look at those.

Monday-20th November 2017- GMT 15.00 and GMT 17.00

ECB President Draghi speaks

On the same day, ECB President Draghi would give his speech twice. One speech is to take place at GMT 15.00 and another one is at GMT17.00. It does not normally happen that he gives his speech twice on the same day. EURUSD traders should patiently wait for the second news hour to finish and find their trading opportunity.

Wednesday-22nd November-2017- GMT 00.00

Fed Chair Yellen speaks

Yellen is going to give a speech at GMT 00.00 on Wednesday. EURUSD pair is supposed to have volatility on that hour. Thus, traders might as well have a plan to use the volatility in their favour.

Wednesday-22nd November-2017- GMT 14.30

Core durable goods orders m/m

Unemployment claims

Two of these high impact news release are to take place at the same time. Unemployment Claims data is to shake the pair. Some great opportunities can be found once after this news hour.

Wednesday-22nd November-2017- GMT 16.30

Crude oil inventories

This news event could make the pair very volatile and produce opportunities on the major time frames. If it does not, then the intraday charts are going to have long spikes for this news event. Thus, EURUSD traders should be careful with their intraday positions.

Wednesday-22nd November-2017- GMT 20.00

FOMC meeting minute

This one is the biggest news event of the next week. Intraday traders should be careful before the volatility takes place and look for the opportunity on the major time frames once the newshour is finish.

The post Weekly Forex News Events for EURUSD – 20th to 24th Nov 2017 appeared first on Advanced Forex Strategies.



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