The BFX contract is an exchange default prediction future. The futures contract is Binary, meaning it will either settle at 0 or 100.
The BFX contract is a prediction future on whether or not Bitfinex will default. The situations which will trigger a default are described below.
BFX will settle at 100:
BFX will settle at 0 if none of the above conditions are met.
The above conditions may be amended with notice at any time.
An Official Announcement is any communication from Bitfinex to its users via email, an official social media account (Twitter, Reddit, WeChat etc.), and or an announcement directly displayed on its website or blog. The determination on whether an announcement is acceptable or not is at the sole discretion of BitMEX. The default will trigger based on the date of the announcement.
This contract will settle at 100 only if an announcement is made. Anecdotal reports of default conditions being met will not be accepted.
Default Probability Percentage = Price of BFX / 100
Traders who belive the default probability is too low will buy BFX contracts. Traders who believe the default probability is too high will sell BFX contracts.
Please see the Binary Series Guide for more details.