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A comment on Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker. Parent comment

Re:Bitcoin Futures Start with a Bang as Rally Trips Circuit ... by pas on Monday December 11, 2017 @06:13AM (#15896348)
> by borrowing a certain amount of cash and using it to buy in the spot market a corresponding amount of the asset on which the futures contract is written;

So if 1 BTC@januar17 is priced 10 000 USD, you borrow 16 000 USD and buy 1 BTC. How does that help you?

> if you do this, the value of your holdings in cash (after paying interest on your borrowings) and in the asset are guaranteed exactly to equal the value of the futures contract at expiry,

Why? If the spot price at expiry is different from 10 000, let's say it sunk to 5 000, then you have to give back cash and you have 1 BTC that is now worth 5 000.

Could you illustrate how the equivalence comes out?

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Re:Bitcoin Futures Start with a Bang as Rally Trips Circuit ... by zAy0LfpBZLC8mAC on Monday December 11, 2017 @06:53AM (#15896489)
> So if 1 BTC@januar17 is priced 10 000 USD, you borrow 16 000 USD and buy 1 BTC. How does that help you?

You don't offer 1 BTC@january 17th for 10,000 USD if 1 BTC spot costs 16,000 USD.

> Why? If the spot price at expiry is different from 10 000, let's say it sunk to 5 000, then you have to give back cash and you have 1 BTC that is now worth 5 000.

You don't have to give back any cash. You sell the BTC, that gets you 5,000 USD, you give the 5,000 USD to the owner of the futures contract (cash settlement of the value of 1 BTC), they pay you the agreed-upon 10,000 USD (in reality, those two payments are netted, so they pay you 5,000 USD, that's it), and you pay back your 10,000 USD loan.

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Re:Bitcoin Futures Start with a Bang as Rally Trips Circuit ... by mlevental on Monday December 11, 2017 @09:31AM (#15897178)
https://www.investopedia.com/terms/c/cash-and-carry-arbitrag...
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