Topic: [ANN] Coinut.com - The only Bitcoin Options Exchange [beta] - page 17. (Read 34182 times)
Yes also about the price index. It's completely open now. Average of bid price and ask price on Bitfinex, btc-e, and Bitstamp. No more weird weighting. Quite a good decision.
BTW, we just added two important metrics. One is the Volume, and the other is the Open Interest. Please take a look.
Nice that you added this.
You also removed the quantity stat but as people said before that wasn't the most useful stat and you can still see the orderbooks.
It would seem that you get a lot of volume on the 30 min contracts.
Looks like they added chinese functionality.
Good observation! Yeah, we are going to expand to China soon. Hopefully, you will see more transactions and liquidity.
50k volume today which is quite a spike. I'm wondering where this is being traded.
Also your market maker seems to be having margin requirement problems or something. Vanilla orderbooks look thin.
Also your market maker seems to be having margin requirement problems or something. Vanilla orderbooks look thin.
In the interview Mr. Wang seemed to indicate that Coinut is currently acting as their own market maker, but they are looking for someone, or others, to take on that roll. Specifically he said multiple times that they are 'using a modified black-scholes option pricing model.' The platform itself has no need for such a model, only the market maker does. So if they are using the model, they must be making the markets.
Hence the elephant in the room here: we are currently trading against Coinut itself, which has a severe information advantage and the power to make ad-hoc adjustments such as how the index is calculated and compiled, as well as margin requirements. Look through the progression of this thread and it is clear they've change the composition of their index at least once. And an aberrant move in that index did trigger their automatic margin call mechanism, at least once. It only takes 'once' to wipe some traders out ...
To be clear, I love the potential here, but they have a long way to go, and until they are able to address these kinds of things, there is reason to be cautious.
We changed the price index because originally we used the bid, ask amount as the weights, and it was manipulated by one smart guy. He put big orders in an exchange and immediately canceled them. This was repeated very frequently, and the result was that the final index biased toward that exchange. To avoid being manipulated again, we changed the index. However nobody received a margin call.
Now, we've fully disclosed our price index, and we will never manipulate the index. We currently have a few market makers. But we cannot disclose their identities for privacy issues. The point is, no matter who you are trading with, we will make the exchange transparent and fair. If you have any suggestions that can make this better, we will be glad to take.
BTW, we just added two important metrics. One is the Volume, and the other is the Open Interest. Please take a look.
50k volume today which is quite a spike. I'm wondering where this is being traded.
Also your market maker seems to be having margin requirement problems or something. Vanilla orderbooks look thin.
Also your market maker seems to be having margin requirement problems or something. Vanilla orderbooks look thin.
In the interview Mr. Wang seemed to indicate that Coinut is currently acting as their own market maker, but they are looking for someone, or others, to take on that roll. Specifically he said multiple times that they are 'using a modified black-scholes option pricing model.' The platform itself has no need for such a model, only the market maker does. So if they are using the model, they must be making the markets.
Hence the elephant in the room here: we are currently trading against Coinut itself, which has a severe information advantage and the power to make ad-hoc adjustments such as how the index is calculated and compiled, as well as margin requirements. Look through the progression of this thread and it is clear they've change the composition of their index at least once. And an aberrant move in that index did trigger their automatic margin call mechanism, at least once. It only takes 'once' to wipe some traders out ...
To be clear, I love the potential here, but they have a long way to go, and until they are able to address these kinds of things, there is reason to be cautious.
50k volume today which is quite a spike. I'm wondering where this is being traded.
Also your market maker seems to be having margin requirement problems or something. Vanilla orderbooks look thin.
Also your market maker seems to be having margin requirement problems or something. Vanilla orderbooks look thin.
Looks like they added chinese functionality.
Just listened to the Whaleclub interview on youtube ... well done.
Glad to hear that you are familiar with ThinkorSwim ... I'm excited for Coinut's potential. Please keep us updated on developments including site development, bringing on additional market makers, and possibly investment partners.
Glad to hear that you are familiar with ThinkorSwim ... I'm excited for Coinut's potential. Please keep us updated on developments including site development, bringing on additional market makers, and possibly investment partners.
The margin was pretty conservative. It is not arbitrarily set. Currently, the market makers need to use about 40% of the notional value as margin to write a vanilla option contact. We monitor the margin level every 5 minutes. If margin calls happen, we first cancel the user's orders, and if this is still not enough, the user's positions will be closed using market orders. This is stated in the FAQ under the question "What if the seller defaults".
How automated is that process? If Btc-e goes down again and the index goes kilter ... are these margin calls triggered?
By 'arbitrarily set' I'm referencing the fact that derivatives exchanges routinely change the margin requirements on their contracts. Of course they will cite reasons, but the changes will always seem arbitrary to others.
My point is, you DO have the option of changing the margin requirements at any time, though at 40% it sounds like that shouldn't be necessary.
Next few days I will set up a second account to play with the vanilla options a bit. Have a look ...
I understand your concerns. We've fixed the bug about the price jump after a price source goes down. So you won't be able to see that again.
Currently, it is unlikely for us to change the margin requirement because the volatility right now is pretty low. But if it rises much higher later, we may need to raise the margin requirement. So we cannot say that we will fix the margin level and never change. Of course, if change is needed, we will notify all the vanilla option writers before the change to make sure they will have enough time to add more money to protect their positions.
Yes, you are welcome to try our vanilla option at anytime. BTW, I traveled last weekend, so you will see the volume and open interest within this week.
The margin was pretty conservative. It is not arbitrarily set. Currently, the market makers need to use about 40% of the notional value as margin to write a vanilla option contact. We monitor the margin level every 5 minutes. If margin calls happen, we first cancel the user's orders, and if this is still not enough, the user's positions will be closed using market orders. This is stated in the FAQ under the question "What if the seller defaults".
How automated is that process? If Btc-e goes down again and the index goes kilter ... are these margin calls triggered?
By 'arbitrarily set' I'm referencing the fact that derivatives exchanges routinely change the margin requirements on their contracts. Of course they will cite reasons, but the changes will always seem arbitrary to others.
My point is, you DO have the option of changing the margin requirements at any time, though at 40% it sounds like that shouldn't be necessary.
Next few days I will set up a second account to play with the vanilla options a bit. Have a look ...
I finally spent some time familiarizing with the vanilla options ... I'm guessing Coinut is getting minimal volume with these?
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
Before you make an order you'll get a confirmation page and it'll ask for the breakeven price.
If I cannot see, at a glance, where the market is at, across different strikes and timeframes, I'm not going to bother 'making an order.' There are other instruments/markets that do this better.
Not to mention ... not sure I'm comfortable trusting a new site and their untested margin regime. Note margin requirements - arbitrarily set - are subject to changes 'based on market conditions.' I haven't seen any explanation of how margin calls will be handled. Likely they are automated to some degree ... uggh.
The margin was pretty conservative. It is not arbitrarily set. Currently, the market makers need to use about 40% of the notional value as margin to write a vanilla option contact. We monitor the margin level every 5 minutes. If margin calls happen, we first cancel the user's orders, and if this is still not enough, the user's positions will be closed using market orders. This is stated in the FAQ under the question "What if the seller defaults".
I finally spent some time familiarizing with the vanilla options ... I'm guessing Coinut is getting minimal volume with these?
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
Before you make an order you'll get a confirmation page and it'll ask for the breakeven price.
If I cannot see, at a glance, where the market is at, across different strikes and timeframes, I'm not going to bother 'making an order.' There are other instruments/markets that do this better.
Not to mention ... not sure I'm comfortable trusting a new site and their untested margin regime. Note margin requirements - arbitrarily set - are subject to changes 'based on market conditions.' I haven't seen any explanation of how margin calls will be handled. Likely they are automated to some degree ... uggh.
I finally spent some time familiarizing with the vanilla options ... I'm guessing Coinut is getting minimal volume with these?
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
Before you make an order you'll get a confirmation page and it'll ask for the breakeven price.
I finally spent some time familiarizing with the vanilla options ... I'm guessing Coinut is getting minimal volume with these?
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
The structure and pricing is not intuitive at all. For example, if we look at the 225 calls priced at .000511/.000619 ... it is not immediately clear at what level one would be profitable on either side. (Yes we can do the calculations, but nobody wants to be punching their calculator in a fast market.) Perhaps the contract size would work better at 0.1 btc, with the option prices stated in US$? The prices would be convertible to btc at the moment of order submission, at the current index value.
Currently I use the binary options to position for a flat-to-rising market. If I want to hedge or take a speculative long, for the time being I would probably look elsewhere ...
As some of you have noticed, BTC-e was down and its price become zero in our server. That's why you saw our price index dropped quite a lot. All positions with the price around 150 will be canceled. Sorry for the inconvenience.
Okay that's completely understandable.
WIll this problem be fixed if exchanges go down in the future?
Thank you for your understanding. Yes definitely. We've fixed the issue. We are now using Bitfinex and Bitstamp. If BTC-e.com comes back again, we will still use it. If all Bitfinex, Bitstamp, and BTC-e.com are down together, which is really rare, we will pause trading immediately.
As some of you have noticed, BTC-e was down and its price become zero in our server. That's why you saw our price index dropped quite a lot. All positions with the price around 150 will be canceled. Sorry for the inconvenience.
Okay that's completely understandable.
WIll this problem be fixed if exchanges go down in the future?
As some of you have noticed, BTC-e was down and its price become zero in our server. That's why you saw our price index dropped quite a lot. All positions with the price around 150 will be canceled. Sorry for the inconvenience.
Indexed fixed. 0613 marketmaker still has bids and asks down there.
Hi,
I witnessed a bit of a bug where the index was at $150. It's slightly worrying. Hopefully when you get the problem resolved you can offer an explanation.
I witnessed a bit of a bug where the index was at $150. It's slightly worrying. Hopefully when you get the problem resolved you can offer an explanation.
I just sent them an e-mail with screenshot. You might sell some puts near the $140 level ... they are bidding a good price!
I'm not sure those transactions would be honored though ...
I got some calls at $160. I think its because of btc-e being down. They should get it fixed and this problem shouldn't happen again.
Hi,
I witnessed a bit of a bug where the index was at $150. It's slightly worrying. Hopefully when you get the problem resolved you can offer an explanation.
I witnessed a bit of a bug where the index was at $150. It's slightly worrying. Hopefully when you get the problem resolved you can offer an explanation.
I just sent them an e-mail with screenshot. You might sell some puts near the $140 level ... they are bidding a good price!
I'm not sure those transactions would be honored though ...
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