OFTEN promoted as a way of mitigating risk, futures contracts are frequently more like new ways of gambling. That was true of a close precursor to the instrument, introduced in the Netherlands in 1636, linked to the hot investment of the day—tulip bulbs. Likewise the world’s first two futures contracts linked to bitcoin. One launched on the Chicago Board Options Exchange (CBOE) on December 10th; the other was due to follow a week later on the Chicago Mercantile Exchange (CME).

As bitcoin’s price has soared to new highs (see chart), holders may be happy to have a way to hedge their exposure at last. But for many, the contracts are just another way in. Both contracts settle in cash (ie, for the difference between the agreed price and the actual spot price). No exchange of bitcoin is needed; similarly, in the Dutch precedent, no bulbs were involved.

Early trading on the CBOE certainly suggests a speculative market. In the first few hours, prices rose so quickly that trading twice had to be suspended. The contract has so far traded at a significant premium, of up to $2,000, to the spot price. This suggests there are more buyers than sellers—even though selling in the futures market offers a way to bet against bitcoin.

It may be that investors are willing to pay some premium to evade the mounting hassle entailed in buying bitcoin. In recent days, many bitcoin exchanges have seen systems failures. Also, prices have differed between exchanges by as much as 25%. And hackers stole bitcoin worth $64m (at the time) from a Slovenian exchange. But the futures contracts have problems of their own. The CBOE’s price is set by an auction on just one modestly sized bitcoin exchange, Gemini. The CME’s price, in contrast, will be based on an index compiled from data from four exchanges. The collateral, or “margin”, required for clearing the contracts highlights their riskiness. The CBOE contract requires 44%; the CME first announced it would charge 35%, but then revised the figure to 47%. On most futures, margins are around 5-15%. Thomas Peterffy, the head of Interactive Brokers, a large brokerage, warns that there could be a risk to clearing-houses themselves. Bitcoin, he points out, “can reach any price”. If bitcoin futures are taken up in large numbers, bitcoin prices rise far enough and end-clients are not able to put up more margin, brokers will be on the hook; a big enough rally could mean small brokers run out of money. This would leave the clearing-house responsible for unwinding the contracts, a difficult task if the margin for bitcoin contracts is mixed with that from other contracts, as now. Mr Peterffy thinks exchanges need to clear bitcoin futures in a separate legal entity. Others share his concerns. In a rare open letter to the Commodity Futures Trading Commission (CFTC), America’s futures regulator, the Futures Industry Association (FIA), a global trade body, criticised the exchanges’ use of a self-certification process for the new contracts. It argued that this did not leave room for a debate about appropriate safeguards and whether separate clearing was needed. Ed Tilly, boss of the CBOE, says accusing his firm of sneaking in the new contract unnoticed is unfair. It has been discussing bitcoin with the CFTC for months (as has the CME).

Despite the unease, many brokers are helping clients use the new contracts. Optimists hope that bitcoin futures will become well-established and even make underlying markets more robust by dampening volatility. Pessimists recall that the tulip-futures innovation of 1636 did not stop the tulip-bulb crash of 1637.