March 19, 2014 | Author: Mircea Popescu

Today being the third Wednesday of March, X.IDIFF.MAR has just settled.

Bitcoin difficulty at time of settlement was 4`250`217`919, a 467.90% increase over the previous. The settlement value should thus have been 0.00425021 BTC per contracti.

Unfortunately, this exceeds the 290% per quarter limit built into the coverage mechanism. As a result, X.IDIFF.MAR were only covered up to 0.00263421 BTCii. Seeing how the contract mostly traded above its coverage valueiii I see myself forced to conclude the contract is not well understood by market participants, which is a problem that will have to be addressed.

That aside, the rate of difficulty increase slowed down for the first quarter in history : Dec 2012 3`370`182 (starting), Mar 2013 4`847`647 (+43.83%), Jun 2013 19`339`258 (+298.94%), Sep 2013 112`628`548 (+482.38%), December 2013 908`350`862 (+706.50%) and finally today 4`250`217`919 (+467.90%). Hopefully next quarter sees an increase under 300% and the usefulness of these contracts can finally be exploited by the market.

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  1. Due to the enormous increase of difficulty the contract trades in 1/10`000 lots since December 2013 . []
  2. Previous settlement (908`350`862) × 2.9 / 10`000 = 263421. []
  3. Very low volume too :

    mircea_popescu $vwap X.IDIFF.MAR
    mpexbot mircea_popescu: X.IDIFF.MAR 1 day: no data 7 day: no data 30 day: average: 0.00294764 high: 0.003 low: 0.00290837 volume: 350 btc: 1.031674

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Category : MPEx  | 5 responses.