To put it in a numerical example what I mean:
Assuming for simplicity 4 days instead of 1 month (until expiry of the Agreement) and the current BTSUSD at day zero price is $1. I believe that upon expiry the BTSUSD will be more so I buy 1 contract FBA BTSUSD @ $1 for expiry after 4 days.
Assuming the daily feed prices. f1=$1.5 , f2=$2 , f3=$0.5 , f4= $4
What will happen on a daily basis is the following:
Average d1=1.25 , therefore +$0.25 on my account
Average d2=1.50, therefore another +$0.25 on my account ($1.5 - $1 - $0.25)
Average d3=1.25, therefore margin call -$0.25 ($1.25 - $1 - $0.25 - $0.25)
Average d4= 1.8, therefore +$0.55 ($1.8 - $1 - $0.25 - $0.25 +$0.25)
Total gain until the expiry of my contract $0.8 (0.25+0.25-0.25+0.55) but settled on a daily basis.
Now with this way you create liquid contracts that can be traded on a daily basis at specific expiry dates (1 month, 1 Q. 6M, 1Y). This way we create a forward curve for BTSBitUSD.
Benefits:
Increased liquidity
Hedging of BTS exposure
Shorts will cover sooner
Bitshares becomes the first decentralized clearing house for bitassets (I always thought BTS as a big derivative clearing house)
Negatives:
I can't think any..