In an efficient market, prices on the futures and spot markets tend to converge. Bitcoin futures are trading at over 10% premium over spot market prices.
In an efficient market, arbitragers identify price differences and establish counter orders in both markets, making a profit without taking risks. In this case, arbitrage traders can sell Bitcoin futures and buy Bitcoins in the cash market, locking in a profit regardless of how the Bitcoin course evolves. According to Bloomberg, Bitcoin futures have posted a premium of ~ 13% since trading began on CBOE on Sunday.
Edward Tilly, CEO of CBOE, told Bloomberg
Arbitrating this gap, but it will be days and weeks. It's not going to be the 12 hours or so we've been up and trading. There is too much to learn. There are a lot of things from the point of view of liquidity and price. (19459008)
While arbitrage opportunities offer opportunities in an ideal market, the Bitcoin market is far from effective. There are price differences between different stock exchanges, Bitcoin trading at a very high price in Asia and in countries like Zimbabwe. However, traders can not take advantage of the price difference, because of the capital controls imposed by various governments.
Since the price varies considerably according to the various stock exchanges, it is important to take into account the reference rate used in futures contracts. . CBOE futures are based on the Gemini exchange rate, while the CME futures contract is based on an index of several stock exchanges. The proposed Nasdaq Bitcoin futures contract should be based on the Bitcoin price of more than 50 sources.
The presence of breakers also represents a difference between the spot market and the futures market. On Bitcoin's debut on the CBOE market, two circuit breakers were triggered, which resulted in the trading halt for a few minutes. There was a stop of 2 minutes when the price gained 10% and a stop of 5 minutes to a gain of 20%. The sharp rise in the price of Bitcoin futures almost translates into a third breaker (30% gain) triggered
High margin requirements, the presence of breakers and the evolving nature of future Bitcoin could explain why Traders have not rushed on Bitcoin futures. The opportunity of arbitrage could entice some of them to plunge their feet into the Bitcoin futures market.