Analysis of CME's first weekly Bitcoin futures report

On April 13, 2018, the Commodity Futures Trading Commission (CFTC) published the first weekly report on the obligations of traders of the Chicago Mercantile Exchange (CME)

Bitcoin futures trading started on CME (Chicago Mercantile Exchange) on December 17, 2017. And only last week the first weekly COT report (Commitments of Traders) appeared for the period from 04/04/2018 to 04/10/2018. 

Analysis of such reports allows us to draw conclusions about what forecasts for the Bitcoin rate are from major participants in the futures market, as well as how traders’ sentiments are changing compared to last week.

Since the contract amount on the CME exchange is 5 Bitcoins, which five times more than on CBOE, futures trading on this exchange is mainly carried out by large investors. As can be seen from the report, only 20 traders participated in trading last week. In the future, CME may introduce E-mini contracts, the value of which will be one Bitcoin. This will attract many more small traders to the exchange and will make the information in the reports more representative. 

The NON-COMMERCIAL column contains information about traders who engage in speculative operations. On the CME and CBOE exchanges, Bitcoin futures are settled, that is, they do not imply any actual delivery of Bitcoin from the seller to the buyer of the contract. Trading is conducted only for speculative profit. Therefore, in the COMMERCIAL column there are no traders who are engaged in hedging transactions.  

The report shows that out of 20 traders, seven have open long positions, and 13 traders have opened short positions. During the reporting week, 9 trading participants opened long positions with a total volume of 1103 contracts, and fourteen opened short positions. The total number of sales is 1341 contracts. The number of sales exceeds purchases by 22%. This allows us to conclude that there is still a bearish mood in the market. 

Since this is the first CME report, it is impossible to conclude from it in which direction the ratio of sellers and buyers has changed compared to last week. Next time such information will be available. For now, we can only say that the percentage of open interest of traders (PERCENT OF OPEN INTEREST) ​​for short positions is 14% higher than for long positions.

Interest in trading futures contracts is constantly growing and, according to CME information, the average daily trading volume has increased from one and a half thousand contracts to two and a half thousand, with 30% of this volume accounting for the Asian market.