FTX MOVE Contracts | Profitable Mechanics explained

Romano RNR
15 min readApr 22, 2020

What are MOVE contracts?

MOVE contracts are a unique derivative offered on the trading platform known as FTX.

In contrast to futures contracts, MOVE contracts reflect the absolute change of Bitcoin's price over a time before the contract expiration date. They have advantages and drawbacks that a player may weigh against his open futures positions.

Disclaimer

You have learned in school, on television, or on YouTube how to visualize atoms, protons, neutrons, electrons, etc.

This model is entirely inaccurate, yet we use it because it helps us visualize the specifics of these abstract subjects.

Consider everything in this article to be an oversimplification to assist you with more advanced reading about options trading (MOVE contracts are basically options straddles)

Buying MOVE contracts ensures that we profit if Bitcoin's price changes substantially either way.

If a daily MOVE contract begins at $500 and the BTC price changes by $300 before expiration (of the day), This MOVE contract will expire at $300, whether Bitcoin's price changes in one direction or another.

If BTC remains to fluctuate within a range, we profit by short-selling MOVE or yield returns.

You are not required to be either bullish or bearish. You maintain a market-neutral stance, and it is a matter of volatility.

Consider a situation in which you anticipate a significant change in Bitcoin's price due to a news event but are unsure whether it will go up or down. Numerous traders attempt to depict the direction and lose by picking the wrong direction due to false…

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Romano RNR

Derivatives trading, investing, cryptocurrency, stocks, forex, options & volatility - programmer & sysadmin