Bitcoin futures are coming this weekend — here's what to expect

On Sunday, the Cboe will finally launch its long-awaited bitcoin futures contract; the CME Group will launch its futures contract later this month.

This will surely add a new element to bitcoin, shifting it from a buy-side-only trade to introducing the ability to go long — or short. This should bring new, larger and institutional participants into the market.

To be sure, any time a new contract launches, you want to get a good gauge of expected movement. Take a look at the average true range of the last 30 days, the last week and day by one exchange's measure.

Last 30 days – High of $18,464, low of $5,868
The last week – High of $18,464, low of $10,797
The last day – High of $18,464, low of $14,610

As one can see based on the wide ranges, this is a volatile contract. Using a stop-loss order is going to prove paramount.

The question remains: Will this just be a short-lived contract, like single stock futures, real estate futures or binary futures?

No one knows.

Two pieces of advice I can offer when diving into trading this product: Markets tend to fall twice as fast as they rise. This occurs when investors catch a long-trending bull move, and then when they see their profits start to slip a "panic" occurs and everyone runs for the exit.

The second one to remember: Plan your trades and trade your plan.

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

Videos

Trades to Watch

Trader Bios

About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more

Connect