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My trading position on Bitcoin
08 Jun 2021 (422 views)

I held a short contract on Bitcoin on 5 June. The contract is for 5 bitcoin at the price of $36,900. The value of the contract is $184,500. I have to put up a margin of $157,000 which is 85% of the contract value. All amounts mentioned in this post are in USD.

I took a short position because I was convinced that Bitcoin was overvalued and that the investors will realize that it does not have any intrinsic value.  They would eventually realize that the reasons supporting the inflated value of bitcoin was not sustainable.

During the weekend, the price of bitcoin fluctuated between $37,900 and $34,900. The platform that I used was closed during the weekend. I had to monitor the price of bitcoin on another platform.

At the worse point (when bitcoin was at $37,900), I had an unrealized loss of $5,000.

Bitcoin fluctuated between $35,100 and $36,500 during the market session on 7 June. 

Bitcoin opened on 8 June at $34,100 and dropped sharply afterwards. The current price is $33,000.  At this price, my short position showed an unrealized gain of $20,000.

I suspect that the main reason was the news that part of the ransom money paid in bitcoin by Colonial Pipeline as ransom money to the hackers had been recovered. This would deflate the theory that bitcoin is secure and anonymous.

There is the possibility of a further fall in bitcoin if some of the investors, especially the corporate investors, panicked and reduce their existing holdings. 

However, the price can be volatile and bitcoin could recover in value through speculative buying. To reduce this risk, I placed a stop loss order at $33,700. If bitcoin passes this price, my short position would be cleared and my gain would drop to $16,000.

Wish my luck for the rest of today.

Note - I do not recommend other people to speculate in Bitcoin, as it is highly risky. I want to share this story so that my readers can follow this adventure, and hopefully learn something about the risk of trading in the futures market.

Tan Kin Lian


My trading position on Bitcoin
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I held a short contract on Bitcoin on 5 June. The contract is for 5 bitcoin at the price of $36,900. The value of the contract is $184,500. I have to put up a margin of $157,000 which is 85% of the contract value. All amounts mentioned in this post are in USD.

I took a short position because I was convinced that Bitcoin was overvalued and that the investors will realize that it does not have any intrinsic value.  They would eventually realize that the reasons supporting the inflated value of bitcoin was not sustainable.

During the weekend, the price of bitcoin fluctuated between $37,900 and $34,900. The platform that I used was closed during the weekend. I had to monitor the price of bitcoin on another platform.

At the worse point (when bitcoin was at $37,900), I had an unrealized loss of $5,000.

Bitcoin fluctuated between $35,100 and $36,500 during the market session on 7 June. 

Bitcoin opened on 8 June at $34,100 and dropped sharply afterwards. The current price is $33,000.  At this price, my short position showed an unrealized gain of $20,000.

I suspect that the main reason was the news that part of the ransom money paid in bitcoin by Colonial Pipeline as ransom money to the hackers had been recovered. This would deflate the theory that bitcoin is secure and anonymous.

There is the possibility of a further fall in bitcoin if some of the investors, especially the corporate investors, panicked and reduce their existing holdings. 

However, the price can be volatile and bitcoin could recover in value through speculative buying. To reduce this risk, I placed a stop loss order at $33,700. If bitcoin passes this price, my short position would be cleared and my gain would drop to $16,000.

Wish my luck for the rest of today.

Note - I do not recommend other people to speculate in Bitcoin, as it is highly risky. I want to share this story so that my readers can follow this adventure, and hopefully learn something about the risk of trading in the futures market.

Tan Kin Lian