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Eqonomics

All You Need to Know About Futures Combinations

April 29, 2022

Adam Wise

All You Need to Know About Futures Combinations

Following the launch of our latest BTC dated future contract, in this week's Eqonomics we provide a quick overview of our range.

Dated Futures Recap

A dated futures contract is an agreement to buy or sell an asset at a specific price in the future.

EQONEX BTC futures are settled physically. Therefore, at expiry:

  • If you are short, you need to have adequate BTC to deliver.
  • If you are long, you need to have adequate USDC to purchase.

Ample Opportunities at EQONEX

BTC dated futures on EQONEX now go out to around one year in expiry in addition to the perpetual future.

Current expiries of the four dated futures:

  • 24 June 2022
  • 30 June 2022
  • 30 December 2022
  • 31 March 2023

More contracts equal more opportunity. 

Considering that each contract can be held long or short, there are 242 potential combinations to choose from!

  • Trading 1 future offers 10 combinations
  • Trading 2 futures offers 40 combinations
  • Trading 3 futures offers 80 combinations
  • Trading 4 futures offers 80 combinations
  • Trading 5 futures offers 32 combinations

For example, if you were to take a position in all 5 of the futures, there are 32 potential combinations:

While going long or short for all five contracts simultaneously probably doesn’t make much sense, other combinations allow traders to access specific opportunities across the curve. This level of flexibility means traders can gain exposure to price direction and the curve shape concurrently. 

Perpetual futures’ basis payments also provide a different angle for traders to find new opportunities.

Current Market Structure

Indicative futures prices, as of 29 April 2022:

Name

Price

Future - Perps

Yield

Annualized

BTC/USDC

[F]

$39,585

-

-

-

BTC/USDC

[220624]

$39,683

$98

0.2%

1.6%

BTC/USDC

[220930]

$40,293

$708

1.8%

4.2%

BTC/USDC

[221230]

$40,653

$1,068

2.7%

4.0%

BTC/USDC

[230331]

$41,886

$2,301

5.8%

6.3%

From the annualized yields, we can see an opportunity around the December contract versus the adjacent September and March contracts.

To better understand how you could trade this term structure, you can refer to Trading Butterfly Spreads.

Further Reading

Want to dive deeper into futures trading opportunities and the curve? Have a look at these previous articles:

Additionally, try it for yourself on EQONEX!

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