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Dec Nineteen, 2018, 08:35 ET
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SALT LAKE CITY , Dec. Nineteen, 2018 /PRNewswire/ — Maverick Trading, one of the top-ranked proprietary trading firms, recently approved Bitcoin spil a trading muziekinstrument for its traders. Beginning January Two nd , 2018, traders ter the rock-hard’s Options division will be approved to trade Bitcoin options spil well spil Bitcoin futures.
Maverick Trading’s management will be outlining approved trading mechanisms and risk management procedures for its traders during an upcoming presentation to the entire rock hard. This special presentation will highlight several stable, defined risk technics for the rock hard’s traders to profitably trade Bitcoin. Bitcoin options will be approved for all traders and Bitcoin futures will be approved on a case-by-case ondergrond.
The hard made this decision after careful consideration, responding to both inquiries from the general public spil well spil requests from the stiff’s existing traders. Prior to this stir, Maverick’s management had demurred, citing a lack of price discovery, liquidity, and safety. Bitcoin’s latest acceptance at the Chicago Mercantile Exchange and the Chicago Houtvezelplaat Options Exchange wasgoed the final factor that led management to approving Bitcoin for Maverick Trading’s traders.
Te an e-mail to the stiff, Robb Reinhold , CEO and Head Trader at Maverick Trading outlined the reasons behind the rigid’s initial reticence spil well spil the reasons for the switch ter policy. Ter part, the e-mail stated:
Price discovery is everything te the world of trading. Unless a trader knows exactly where they can uitgang the trade, risk management and decent trading mechanisms are not possible. Ter those conditions, a trade becomes a gamble. The crash of 2007-08 has most likely the best example of what not having price discovery can do. Ter the early 2000’s, companies sold fresh products called MBS (Mortgage Backed Securities) and CDO (Collateralized Debt Obligations) that didn’t trade on any exchanges. Prices were negotiated brokerage desk to brokerage desk whenever someone dreamed to buy or sell, creating a gray market. Ter order to “find out” what your MBS or CDO wasgoed worth, you would have to call around to find a buyer and the price they were willing to pay. Once the real estate and stock markets crashed, MBS and CDO sellers found out there were no buyers and technically thesis assets were worth $0 at the time. Price discovery is the most significant thing which is why wij concentrate on trading on major exchanges.
Liquidity goes forearm te mitt with Price Discovery. Price discovery shows you the current market price but liquidity is about how many market participants there are. You need both to be able to stir ter and out of a position. One of the early things (still a smaller problem today) that plagued cryptocurrency buyers and sellers wasgoed the delay inbetween the transaction on the screen and delivery of the product. The futures market gives us a excellent way to trade Bitcoin since futures are a derivative product where there is technically no transfer of ownership of the security. Because of this, wij only have to worry about the entry and uitgang price of the trade and not on any delays for the delivery of the product. The Chicago Houtvezelplaat of Options (CBOE) and Chicago Mercantile Exchange (CME) are both publicly traded exchanges with a very long and stable history of a fair marketplace. I expect the volume on the futures contract to be comparable to the volume on the Bitcoin itself.
With regard to safety, overheen the history of Bitcoin and other cryptocurrencies, wij have heard reports of Bitcoins being “lost” or stolen. Just a few weeks ago, on December 7 th , 2018, more than $70 million Bitcoin (Four,700) were stolen from a digital currency toneelpodium named NiceHash. http://money.cnn.com/2018/12/07/technology/nicehash-bitcoin-theft-hacking/index.html Thesis exchanges treat transactions and hold bitcoins for customers. While it wasgoed not disclosed who possessed the Bitcoin, wij can assume it wasgoed spread across a broad swath of NiceHash customer accounts. With the laws being so fresh around cryptocurrencies, there are no mechanisms te place for victims to pursue recompenses. This can leave bitcoin holders literally left holding an empty bag. This is why wij have only approved the trading of Bitcoin futures on the CBOE and CME for our traders. There is just too much unknown risk concerning safety and security of thesis fresh exchanges that have popped up overnight. Wij do not permit the actual purchase of Bitcoin te our capital accounts.
Reinhold expanded on the topics within the e-mail. “One of the problems with Bitcoin and other cryptocurrencies is there is a broad range of prices available at different exchanges where people can buy and sell cryptocurrencies. A trader can get three different quotes, hundreds of dollars exclusief, at three different exchanges. A trader has a range of value but won’t be sure of the price it’s actually trading for ter the market. December Ten th wasgoed the very first time Bitcoin futures traded at the Chicago Houtvezelplaat of Options Exchange (CBOE) and December 17 th on the Chicago Mercantile Exchange which should help with the gap inbetween prices te the bitcoin exchanges.
“Before the futures contracts, there wasgoed truly no way to brief Bitcoin. The inability to brief an muziekinstrument actually exacerbates market swings. On the way up, without a market maker able to go brief to voorkant incoming orders, the supply is unnaturally constrained, driving prices higher than expected. On the way down, there may be broad gaps inbetween bids, causing the price to crash swifter than what is common ter a smooth-running market.”
Jon Frohlich , COO of Maverick Trading, discussed the hard’s plans on managing the risk of trading Bitcoin. “Bitcoin’s price act has bot wild. Indeed, it’s bot joy to witness and read the whirr that it’s generated. When wij finalized plans to stir forward with permitting our traders to trade Bitcoin, risk management wasgoed very first te our minds. Wij’ve highlighted existing trading mechanisms that wij can use to trade it, but wij’ll also be reiterating position sizing and stop-loss guidelines to our traders. Our in-house risk managers have bot fully briefed to backstop our traders. Based on the historic spectacle of our traders, wij expect them to adapt lightly.”
To apply to become a trader with Maverick Trading, visit www.mavericktrading.com and click on Apply Now.
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About Maverick Trading
Founded ter 1997, Maverick Trading is a private proprietary trading hard, focused on position and sway trading options ter equities and exchange traded funds, headquartered te Salt Lake City, Utah .