Bitcoin Bears Can Soon Short Futures Through Interactive Brokers

(Bloomberg) -- Interactive Brokers Group Inc. plans to let bitcoin bears bet against the digital currency’s recently debuted futures contracts.

Starting this week, the brokerage will allow its users to take short positions on bitcoin futures under certain conditions, according to company spokeswoman Kalen Holliday, who said the decision was made “in response to client demand.” Interactive Brokers has accepted long positions with a margin requirement of at least 50 percent since the contracts debuted Sunday on Cboe Global Markets Inc.

Shorting bitcoin futures, or betting that their price will fall, is potentially an even riskier strategy. It’s possible to lose an unlimited amount of money on a short position, particularly if the cost of the digital currency and its derivatives continues to climb. 

Interactive Brokers has a few requirements for shorting bitcoin futures: the spread must be one-to-one, and the short leg must have the earlier expiry date so that once it expires the surviving leg will be long, according to Holliday. Trading won’t be offered in retirement accounts or to Japanese residents.

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