Cryptocurrency derivatives exchange FTX is increasing the margin requirements on its TRUMP and other President 2020 futures contracts.
Announced Friday, the exchange said it is upping the initial margin requirement to $0.50, meaning traders must put up that amount to acquire 1 short TRUMP contract. The change comes in on Saturday at 12:30 UTC.
Conversely, users wishing to go long TRUMP require $0.36, which is also the current price of the futures contract.
The pricing suggests traders are factoring in President Donald Trump’s chances of reelection come Nov. 3, when the U.S. heads to the polls and, by their estimates, the odds look to be dropping.
FTX outlines on its website that, ignoring fees, inefficiency and spread, the price of one TRUMP contract equals the president’s expected chances of reelection. Therefore, if users believe there’s a 52% chance of the president’s reelection then the contract should trade for $0.52.
TRUMP contracts expire at $1 if Donald Trump wins the election and at $0 should he lose.
The price of the other President 2020 contracts should also roughly equal the probability the corresponding candidate wins the general election, the exchange said.
The price of the BIDEN contract at press time is $0.65, up 0.31% on the day.
Comments (No)