Futures 1

Futures contract expiration


Quick reminder : « A Future contract is a derivative product and is an agreement to buy or sell a commodity, currency or other instrument at a predetermined price at a specified time in the future. They are either physically settled or cash settled. BitMEX offers several of its trading products in the form of a Futures Contract with cash settlement. »

Now, that’s very nice definition but I would like to draw your attention on the following sentence: «a specified time in the future». So it is important to understand that futures contract have an expiration date (a bit like your milk in your fridge?).

Futures contracts can be traded purely for profit, as long as the trade is closed before expiration
I see you coming : « What happens to my position on expiration date ? »
Once the futures settle, the futures position goes away and the corresponding settlement P&L appears in your wallet balance.
– So if you want to continue the position, you would have to open a new position after the first one settles. Or you can close the original position prior to settlement and around the same time open a new futures position with a later expiration date.
On the associated image you can see the listing date and settlement date for the futures listed on Bitmex.
You want more details ? Easy, click here : https://www.bitmex.com/app/contract/XBTM19
You will be able to see the full contract details. Let’s deep dive in an example XBTM19 :
XBT = stands for Bitcoin.
M = is the expiry month code, stands for June.
19 = 2019.
So XBTM19 indicates that this contract is a future contract for Bitcoin which will settle at the end of the month of June. In the details you can see : it will be June 28, 2019 at 2:00:00 PM.

Futures contract expiration - 4C Trading

What’s next ?

New name, new expiration date but business as usual. Say hi to XBTU19.
If you followed this article, you understand that XBTU19 is a new future contract, already available (since March 15, 2019) which will expire in September 2019.
Now for your general knowledge : « BitMEX uses the following industry-standard month codes to name its instruments. These are the same as those used on NYMEX, CME, and all other major derivatives exchanges. When present, the month code signifies the delivery month of the future. »
F (January) / G (February) / H (March) / J (April) / K (May) / M (June) / N (July) / Q (August) / U (September) / V (October) / X (November) / Z (December).
Hope you learned something ! ✅
PS : from now on, all the trades that will be launched on our channel will be on the new futures contracts.

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