The BFX chain of futures allows traders to speculate on the future value of the Bitfinex Token (BFX/USD) exchange rate. Traders can trade these futures without holding BFX Tokens; only Bitcoin is needed to trade.
Bitfinex Tokens are a special instrument issued by Bitfinex in the wake of the hack on August 2, 2016, where 119,756 Bitcoin were stolen.
Bitfinex issued a haircut of 36.067% to all user assets, including USD. When Bitfinex began trading again at 16:00 UTC on August 10, 2016, all users received an amount of BFX tokens equal to 36.067% of the USD value of their assets at the time of the hack.
BFX tokens are currently trading on Bitfinex in USD and XBT markets. The BFX futures contract series trades the BFX/USD exchange rate.
BFX futures’ underlying is the BFX/USD exchange rate as recorded in the .BFX Index. The futures are quoted in USD. Margin and PNL are denominated in Bitcoin.
|Multiplier||0.1 XBT per BFX|
|XBT Contract Value||Multiplier * Futures Price * 1 BFX|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multipler * (Exit Price - Entry Price)|
Traders who want to speculate whether Bitfinex will redeem the BFX Tokens at par will buy the futures contract. Conversely, traders who believe the BFX Tokens will head towards zero will sell the futures contract.
All margin is posted in Bitcoin, that means traders can go long or short this contract using only Bitcoin. The BFX futures contracts feature a leverage of up to 2.5x.
For example, to buy 10 Bitcoin worth of contracts, you will only require 4 Bitcoin of Initial Margin.
The BFX futures contracts settle on the .BFX30M Index Price. Settlement occurs on the last Friday of each month at 12:00 UTC.
A trader wants to goes long 20 XBT of BFX futures contracts. BFXQ16 (August 2016 BFX Futures Contract) trades at 0.40 USD. As the leverage is 2.5x, the trader only needs 8 XBT of margin for this trade.
The trader must buy 500 contracts: 20 XBT / (0.40 USD * 0.1 XBT).
A few days later, the price rises to 0.50 USD and the trader sells all their contracts.
The trader’s profit will be: 500 * 0.1 XBT * (0.50 - 0.40) = 5 XBT