The Zcash (ZEC) derivative is in the form of a Futures Contract and allows traders to speculate on the future value of the Zcash / Bitcoin (ZEC/XBT) exchange rate. Traders need not have Zcash to trade the futures contract as it only requires Bitcoin as margin.
Currently spot trading of ZEC/XBT has not begun. Once trading of ZEC/XBT begins in the secondary market, the price will be recorded in the .ZECXBT Index and this index will reflect the spot price on the most liquid exchange.
The futures are quoted in Bitcoin and all margin and PNL calculations are denominated in Bitcoin.
|XBT Contract Value||Multiplier * Futures Price * 1 ZEC|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multipler * (Exit Price - Entry Price)|
Traders who think that the price of ZEC will rise will buy the futures contract. Conversely, traders who believe the price will drop will sell the futures contract.
Because ZEC does not have a liquid underlying spot market, the market is marked to Last Price. To prevent overt manipulation, ZEC has a Limit Up / Limit Down price. The Limit Up / Limit Down is set at a price equal to one maintenance margin (25%) away from the Last Price. For instance, if the Last Price were 0.100, the Limit Up would be 0.125 and the Limit Down would be 0.075.
The price may only trade within these bands. At 4:00, 12:00, and 20:00 UTC, these limits reset, centering on the last traded price in the previous 8-hour session.
You can see the current Limit Up / Limit Down prices in the Contract Specification.
All margin is posted in Bitcoin, that means traders can go long or short this contract using only Bitcoin. The ZEC futures contracts feature a leverage of up to 2x.
For example, to buy 10 Bitcoin worth of contracts, you will require 5 Bitcoin of Initial Margin.
The ZEC futures contracts will settle on the .ZECXBT30M Index Price. Settlement will occur on the last Friday of the Settlement Month.
A trader wants to goes long 10 XBT of ZEC futures contracts. ZECZ16 (the Zcash futures contract expiring in Dec 2016) trades at 0.0100 XBT. As the leverage is 2x, the trader only needs 5 XBT of margin for this trade.
The trader must buy 1,000 contracts: 10 XBT / (0.0100 XBT * 1).
A few days later, the price rises to 0.0150 XBT and the trader sells all their contracts.
The trader’s profit will be: 1,000 * 1 * (0.0150 - 0.0100) = 5 XBT