The CBOE has announced that it will launch their BTC cash settled futures contract on Sunday Dec 10. This is a week ahead of the announced launch of Dec 17th of the CME's BTC futures contract.
This has prompted a lot of chatter about how hedge funds are setting up to short the contract and that is grabbing headlines. The results of shorting and offset buying will finally be seen in the next few weeks and the impact that it has on the value/price of BTC. There are certainly hedge funds and individuals that are going to short BTC and assume the unlimited upside risk of such a position. There will be some number of market participants who will be buying these contracts as well. Where either of these trade in relation to the cash price of BTC is anyone's guess and I for one am quite interested to see this market open.
Arbitrage by hedge funds or prop trading groups will look to profit from the spread between cash and futures and as time goes on this will become very efficient and the basis will likely narrow. One key point of discussion in the lead up to the inauguration of futures on BTC and likely many others to follow is that this should take some of the volatility out of the market. I don't know if this effect will be seen or if adding a large pool of active participants to this market will actually add to volatility . We will see in the coming weeks.
So get ready Sunday Dec 10th is just 6 days away!!