Bitcoin and Micro Bitcoin futures have finally become a good trading contract for day trading and short term trading. We share our thoughts on how to take long and short trades in the futures market with some hypothetical research that we will release to our All Strategy Access Subscribers. These strategies might be traded in some of our portfolios.
We compare the Micro Bitcoin (MBT) and Bitcoin (BTC) futures contracts order books for liquidity. The MBT contract is 1/10th of a Bitcoin while the BTC contract represents 5 Bitcoins. The BTC contract is 50 times larger than the MBT contract.
Liquidity is always a consideration in trading and these cryptocurrency markets are finally liquid enough with good range to be tradeable instruments. There can be a "sweet spot" when it comes to new contract offerings. Initially, new contracts may not be liquid enough but as they become more liquid, there is a window where there can be some good short term trading opportunities. As a futures contract matures and becomes more popular, it can sometimes become "gridlocked" in a thick order book, generating smaller daily ranges.
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