The U.S. Commodity Futures Trading Commission(CFTC) is responsible for the regulating of futures and open markets and makes sure that there is no deceitful conduct taking place in the trading of futures contracts. Recently, the data displayed by them showed that the market speculators were holding a short position for Bitcoin futures this week.
The non-commercial investors, known as the speculators in the market, held a short position for Bitcoin futures while the contracts that were held by the speculators decreased in number. The commercial traders who are treated as hedgers held a net short position of 26 contracts.
Speculators and hedgers are different types of investors in the market where speculators try to make a profit from the assets price volatility. On the other hand, hedgers work in the direction to reduce the risk that is created during the price volatility and holding period of assets.
Whenever the investors mention the term “short” for any financial asset like currencies, commodities, options or futures, this means that they hold a bearish prediction for the asset in the market and believe the value will drop in future.
The price of Bitcoin saw moderate movements as it traded near the $10,000 mark while the market remained steady at about 180 billion dollars. The Bitcoin futures that are traded at Chicago Mercantile Exchange in the U.S. are the financial derivative contracts which obligate the users to transact an asset at a predetermined future date and price where each Bitcoin future includes 5 Bitcoins.