Many traders and market makers have asked for a way to roll their daily Bitcoin / USD futures contracts (XBT24H) from day to day. Each day at 12:00 GMT, any open position on XBT24H vanishes and traders must go long or short again. For traders wishing to have a constant exposure or hedge over the expiry and settlement period, a way to roll XBT24H contracts from day to day is desired.
BitMEX has now listed a 48 hour Bitcoin / USD futures contract, XBT48H. XBT48H expires every 24H, and becomes XBT24H, which will then expire 24 hours later. XBT48H will immediately re-list every 24H.
You buy 1,000 XBT48H contracts on T at 12:01 GMT. At 12:00 GMT T+1, the XBT48H expires and your long 1,000 contracts of XBT48H becomes a long position in XBT24H. Your average entry price is not affected.
Traders can use XBT48H to effectively roll their XBT24H position from day to day with very little market slippage.
You are long 1,000 XBT24H contracts at $500 and you want to keep your long position after XBT24H expires.
You buy 1,000 XBT48H contracts at $500 and sell 1,000 XBT24H contracts at $500 before XBT24H expires and settles. You now have a long 1,000 XBT48H position.
When XBT24H expires at 12:00 GMT. Your long 1,000 XBT48H position becomes a long XBT24H position, which will expire and settle in 24 hours.
Once traders become comfortable trading XBT48H, we will list the XBT24H_48H calendar spread. The calendar spread will have its own orderbook, which will make rolling XBT24H contracts even easier and cheaper.
We believe that the addition of the XBT48H contract will help market makers manage their positions better, which will in tern lead to more liquidity on BitMEX.