The XBC chain of futures contracts allows traders to speculate on the future price of the Bitcoin / Chinese Yuan (CNY) exchange rate.
The XBC futures’ underlying is the Bitcoin Yuan Price Index. Both the underlying and the futures are quoted in CNY. Margin and PNL are denominated in Bitcoin.
|XBT Contract Value||Multiplier / Futures Price in CNY|
|CNY Contract Value||10 CNY|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multiplier * (1/Entry Price - 1/Exit Price)|
Traders who want to profit from an increase in the Bitcoin / CNY Index, will buy XBC futures contracts. Conversely, if they believe the price will go down they will sell the futures contracts.
All margin is posted in Bitcoin, that means traders can go long or short this contract using only Bitcoin. The XBC futures contracts feature high leverage of up to 100x.
For example, to buy 100 Bitcoin worth of contracts, you will only require 1 Bitcoin of Initial Margin.
The XBC futures contracts settle on the Bitcoin Yuan Price Index. Given these futures contracts have a fixed expiry date and thus will trade according to an annualised basis, for marking and liquidation purposes these contracts are marked according to Fair Price Marking.
A trader wants to goes long 100 XBT worth of XBCZ16. XBCZ16 (the December 2016 Bitcoin CNY futures contract) trades at 5,000 CNY. As the leverage is 100x, the trader only needs 1 XBT of margin for this trade.
The trader must buy 50,000 contracts: (5,000 CNY / 10 CNY) * 100 XBT.
On settlement, the Bitcoin CNY Price Index settles at 10,000 CNY.
The trader’s profit will be: 50,000 * 10 CNY * (1/5,000 CNY - 1/10,000 CNY) = 50 XBT