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RE: How Bitcoin Futures Will Affect Price
Also the Black-Scholes valuation of contracts would make the premiums very very high due to underlying volatility.
However, as best as I understand the proposed contracts will be cash settled in USD which implies that even a dreaded short squeeze of naked contracts will not automatically mean a rush to buying BTC to cover the positions.
From what I know there won't be Bitcoin options contracts only futures.
But you're right if options were to be introduced, the implied volatility will result in very high premiums.