Index futures are futures contracts where a trader can buy or sell a financial index today to be settled at a future date. Index futures are derivatives meaning they are derived from an underlying asset — the index. Some of the most popular index futures are based on equities. However, each product may use a different multiple for determining the price of the futures contract. As an example, the value of the S&P 500 futures contract is $250 times the S&P 500 index value. The E-mini S&P 500 futures contract has a value of 50 times the value of the index.
The Synthetic PoW Mining Contract is a typical index futures contract. So we should adopt the concept of contract size from index futures as follows:
Contract Size
- The value of one contract = Multiplier * The index value
- Multiplier = 1 WBTC
In the long run, the BMI index is declining. This will cause the contract size to drop, which is not good for trading. In the future, we can increase the contract multiplier to ensure that the contract size is within a reasonable range. Even we can set the contract multiplier equal to 10 WBTC at the beginning.
Index futures are futures contracts where a trader can buy or sell a financial index today to be settled at a future date. Index futures are derivatives meaning they are derived from an underlying asset — the index. Some of the most popular index futures are based on equities. However, each product may use a different multiple for determining the price of the futures contract. As an example, the value of the S&P 500 futures contract is $250 times the S&P 500 index value. The E-mini S&P 500 futures contract has a value of 50 times the value of the index.
The Synthetic PoW Mining Contract is a typical index futures contract. So we should adopt the concept of contract size from index futures as follows:
Contract Size
In the long run, the BMI index is declining. This will cause the contract size to drop, which is not good for trading. In the future, we can increase the contract multiplier to ensure that the contract size is within a reasonable range. Even we can set the contract multiplier equal to 10 WBTC at the beginning.