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ICE announces initial margin requirements for Bakkt bitcoin futures contracts

Wed, 11 Sep 2019, 07:06 am UTC

The Intercontinental Exchange (ICE) has announced tentative margin requirements for Bakkt Bitcoin Monthly and Daily futures trading contracts.

The announcement comes just days ahead of the launch Bakkt’s much-awaited futures contract offerings on September 23. Last week, Bakkt Warehouse started accepting customer deposits and withdrawals.

According to a notice dated September 09 on ICE’s official website, the initial hedge requirement for daily and monthly futures contracts is $3,900, while the speculative initial requirement for both contracts is $4,290.

Speaking to CoinDesk, John Todaro, director of research at TradeBlock, explained that the initial margin requirements basically mean the amount of assets required to be pledged for opening a position and are for accounts that already have exposure to bitcoin.

“Speculative requirements are for those accounts that are speculating on the price move on bitcoin through futures contracts. The CFTC and other regulating agencies have rules in place to protect futures markets from excessive speculation, which can lead to deviant price fluctuations, volatility, etc.,” he added.

The notice further reveals that the inter-month add-ons for both the contracts will vary between $400 and $1,000 for the hedge rate and between $440 and $1,100 for the speculative rate. ICE also clarified that the margin rate will vary within the range depending on “the expiration date and the difference in expiration dates of contracts.”

In a previous announcement dated August 16, ICE had said that exchange and clearing fees for the new contracts will be waived through December 31, 2019.

Earlier this week, Bakkt announced that the bitcoin deposited at its regulated custodian, Bakkt Warehouse, is protected by a $125 million insurance policy.

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