Interactive Brokers Allows Bitcoin Bears to‎ Short CFE Futures

US-listed brokerage Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) today ‎enhanced its cryptocurrency offering by enabling the short trading of Cboe Futures Exchange (CFE) Bitcoin ‎futures‎‏.‏ Potential Bitcoin bears, however, need to be aware of the dangers ‎involved with the extremely risky financial product‏.‏

In addition, the cost to short Bitcoin is not cheap. In order to protect the company, ‎IB will accept Bitcoin’s short positions with a margin requirement of $40,000 ‎per contract, five times the value required for long positions of CFE Bitcoin ‎futures. ‎Since the contracts debuted on Sunday at Cboe Global Markets, Interactive ‎Brokers has required Bitcoin bulls to deposit a margin of ‎$9,000.‎

While the company now enables its clients to easily access the price ‎movement of the world’s most popular cryptocurrency, it said that the new ‎offering doesn’t limit the potential losses associated with directing ‎investment funds to bet against Bitcoin futures contracts.

Interactive Brokers founder, Chairman and CEO Thomas Peterffy pointed ‎out that betting against the cryptocurrency is very risky given Bitcoin’s ‎volatility‏.‏ However, he noted: “The introduction of short sales was ‎necessitated by the large premium of the January futures contract over the price at which ‎Bitcoin trades on the physical venues.” ‎

Before IB’s action, the option to short Bitcoin has been mostly ‎available in the past few months through CFD products that are ‎offered by many forex brokers. This is not to mention that this hasn’t exactly been ‎a good choice so far, given the coin’s 17-fold surge in price. But for ‎those daring enough to try again, they now have a more regulated venue to ‎bet against the rise.‎

Short selling, in general, means selling an asset or derivative that you don’t own when ‎you expect its price to fall in the future. When it does, you buy back the ‎asset at the lower price and make a profit. It is the opposite of ‎buying the instrument (going long), where you profit when the price goes up ‎and lose when it goes down‏.‏

(Photo: Interactive Brokers)

bitcoin
Bitcoin (BTC) $ 69,375.59 0.99%
ethereum
Ethereum (ETH) $ 3,714.94 8.01%
tether
Tether (USDT) $ 1.00 0.14%
bnb
BNB (BNB) $ 609.64 3.16%
solana
Solana (SOL) $ 175.22 6.73%
staked-ether
Lido Staked Ether (STETH) $ 3,713.70 8.01%
usd-coin
USDC (USDC) $ 1.00 0.15%
xrp
XRP (XRP) $ 0.537046 0.44%
dogecoin
Dogecoin (DOGE) $ 0.164576 4.28%
the-open-network
Toncoin (TON) $ 6.35 3.79%
   
$0.0000  $0.0000  (0.00%)
   
$0.0000  $0.0000  (0.00%)
   
$0.0000  $0.0000  (0.00%)
   
$0.0000  $0.0000  (0.00%)
   
$0.0000  $0.0000  (0.00%)
   
$0.0000  $0.0000  (0.00%)