Contract details : The contract delivers the funding rate of the ETHUSD pair of the Bybit exchange . Another long fixed rate position allows the contract to be delta neutral : when BTC goes up or goes down, the price of the contract is not directly impacted. Not at any moment the capital is at risk at maturity, except because of the impact of the funding (that can be negative).
Historical price of the contract :
Favorable scenario : Market is bullish/remains steady on ETH.The funding is very positive and offers more than 200%/year
Average scenario : Market remains steady or drops orderly with bounces : the funding is positive on average and we expect a positive performance of the product despite the downtrend and the increased pobability of negative fundings
Adverse scenario : Market dumps continuously without any buying appetite until maturity
Estimated move of the BTC if extreme scenario materializes (as of 23/06) : None. The capital is not at risk. The collateralization ratio is supposed to remain above 95% at all time. The only risk at maturity is having negative fundings more than positive fundings during the holding period
Estimated probability of materialization of the extreme scenario as of 19/06: 0%