Topic: [ANN] Coinut.com - The only Bitcoin Options Exchange [beta] - page 6. (Read 34192 times)

Thanks for taking the time to reply Chris. Looks like i have some learning to do, this is bit more complex than the leveraged trading I'm used to on finex and kraken.

So floating P/L is based on doing a market order. So it takes into account spread. You'd get a negative P/L because if you bought and then market sold you'd lose money.

I'm not sure if you're doing vanilla options. As mentioned you can get negative P/L because of the spread. But for vanilla options you can get negative P/L on PUTs because of time decay. When you buy a PUT there's a premium, the premium decreases as you near settlement. You paid for the premium and now its less which might be more negative P/L. There's a similar thing with binary options. If it moves a lot (high volatility), in the money options will be cheaper. This might be a bit too complex, ask me if you have more questions.

3. For binary options there's a slight difference being a call binary options pays >= strike, and a PUT binary options pays for <= strike. So if it's on the strike then both the CALL and the PUT get paid out. That's why it's slightly different when you sell a PUT and buy a CALL, or sell a CALL and buy a PUT.

3. For vanilla options Selling and buying is really different. When you buy an option (CALL or PUT), your risk is limited. You can only lose as much as the premium you paid for the position. Your upside potential on the other hand is unlimited (sort of). When you buy an option it'll tell you based on the premium where your break even price is. That's why vanilla options are called non-linear products unlike futures. Futures and spot trading your profit/loss is linear. With options it's a bit different since risk is capped. One more thing, this is why buying options is called Longing volatility. You pay the premium, you're betting that the price will out of the range so you make money on the premium, you could also say its like buying insurance, in case the price moves that much.

3. Likewise, when you sell options, you're shorting volatility. You get to collect a premium. But if it's extra volatile, and the price moves enough in the wrong direction, you're going to lose the premium and lose money. If it stays flat or moves in the other direction, you're going to make money. When Selling options your profit is capped to the premium, and your risk is unlimited.

So I hope you can understand how Buying and Selling Vanilla options is quite different.

4. You do not need to wait until expiration. You can do two things, you can make another trade to hedge your position. When you do this you have to pay a fee. The other option is to click the close button. When you close a position like this you don't need to pay a fee again. If your option is well in the money, it may be better to hedge.

Let's say you have a 228 binary CALL option. You want to take profit, you can sell it for 0.009 but instead you could also sell a 230 CALL option also for 0.009. So now you're hedged into settlement. Except there's the case where you make even more money if it settles between 228-230.

5. I'd need more details. When you buy a contract you can't lose more money then you have. But there's also the fee that you paid. Honestly, I don't even look at P/L.

So tell me if you need any more explanations.

To people reading this, you can click the link in my signature to sign up for Coinut.

I wish someone would make a youtube video and walk through everything on how to trade on coinut. It's a little confusing for a first time options trader.

I have lots of questions if anyone is bored on a Friday night and wants to answer them

1. Why does my floating P/L swing so dramatically?
2. Why is the P/L showing negative, when the price is going down and I placed a PUT order?
3. If Call is for a long position and Put is for a short position why are the sell buttons? Shouldn't they all be buy buttons, or just Call vs Put buttons?
4. Do you have to wait for the expiration time to occur or can close it out early? Is that what the sell buttons are for?
5. If I bought a contract for 0.003 but my P&L is -0.0034  will I lose additional funds on top of the cost I already paid to place the position?

Thanks. You are welcome to try.

BTW, our liquidity has recovered.

The interesting thing about options is that you can make money when the price isn't volatile unlike futures or margin trading.

and site looks really cool. I will be funding my new account shortly and make some trades.

You are right. Now if you want to see price with more decimals, just click the price on the Trade page.

Is viable the possibility to have vanilla options that expiry every 1 or 2 days?

I ask that, because I'm most interested in day trading, when my strategy goes wrong I need to wait days to neutralize my negative balance.

I'm looking to use binary options for my strategy because they low time-frame, the problem is they are more expansive.

Thanks.

Okay, spread bets suck.

There's also been complaints by other people about not getting paid put options that hit the strike. And that's because the Coinut index actually has 8 decimals.

So spread options suck and if you're closing a binary option position it would be recommended to close the position instead of buying the corresponding hedge. You have to pay an extra fee by buying the corresponding hedge and the extra fee is probably not worth it for the chance that it'll land on the strike.

Also as a customer I think it would be beneficial to show more decimals on the index.

ORDER OPEN is for orders. It means that your order is on the market book.

POSITION OPEN is for your positions. It's the contracts that you bought (or sold).

I hope that makes sense.

The benefit of closing a BUY CALL|PUT is that you don't need to pay the fee for closing positions.

The vanilla options are european which means there's no early assignment. When you close a BUY VANILLA PUT it means you're selling the right to exercise the option on the expiry date to someone else.

Hello, anyone know the difference between POSITION_OPEN and ORDER_OPEN in API call?

I'm implementing order close API call, but, doesn't make sense to close a BUY CALL|PUT, so, when I close a BUY VANILLA PUT I'm exercising it?

Note: Self trading has been fixed. You won't see it being reported for volume per contract and daily volume.

Also Coinbase has been added to the index. It seems Coinut also wants to make their index more robust.

Also note the term Kelly betting. A +EV wager is still a bet.

The spread bet is just an interesting wager which is low risk 10% usually depending on the spread. And it's a bet on the strike ending on a zero. It's positive EV if you think the probability that it'll land exactly on a strike is more than 10% of the time.

Actually, I still think it's not betting. If you have the skills, you can estimate the probability and make profit consistently.

Coinbase is just added. If you know other liquid market, please let me know.

Okay, so that other post was because I thought Bitstamp was down. But actually you don't include Bitstamp in your index calculations because of a high spread. And this makes a lot of sense.

So from this I see that Coinbase would be a good candidate to make the index more robust. Coinbase has low spreads and high liquidity.

Also from playing around on the 10 minute options. I've realized that a spread of 0.06 means that including fees you could do a spread bet of 10% risk to get 200% return. So more of a 5% fee.

Actually redoing the math. Occasionally you lose 0.1 contracts sometimes you win 1 contract. So that's 10%. If you think the range is tight enough you could try doing a spread bet.

Though the spread is usually more than 0.06, including fee it might be 0.15. Obviously the market maker takes into account spread bets, but this is just a low risk strategy for a gambler.

Okay so that's spread bets. Been thinking about them because of all the close calls on 5 minute options. Also over the last 3 days I've paid 0.4 BTC in fees. Seriously needs some incentives for people who do high volume for fee discounts. Bitfinex, Kraken, and okcoin have similar programs.

Hi, do you think you should develop procedures when an exchange goes online?

I don't think you should add it right away. This might be too complex for you guys. But I think that when an exchange goes back online from being offline the price will not be accurate for a bit. And it may cause a jump in the index price if its different. Or only add new exchanges 5 seconds after the 5 minute close. That's easier to implement. This will only need to happen if it's been down for more than 5 minutes.

Good suggestion. We will change the format in the history.

Nice one! I've seen more changes today, as well. I like the "time to expiry" change to the tabs on the trading page.

One change I'm less keen on is when I download historical positions from the history page - the opening time format has changed from "YYYY-MM-DD HH:MM:SS" to "Sep 21, 12:00" - the comma makes it really tricky to import the downloaded file to a spreadsheet, and makes it inconsistent with the other date fields in the file.

Now we have an even more robust price index.

Yeah you need to publish your 5 minute expirations some where for more transparency and accountability. Quite amazed you added 5 minutes.

Also 20 cents and 10 cents strikes sound like a good system. Yeah some transparency would be good. Bitmex publishes the 5 minute snaps they use from Bitfinex.

Also how is the engine doing? It couldn't really handle volatility before (from the extra trades). And users can't be blamed for trading more.

And I think you might need to do something about self trade statistics. It does make sense that market makers may self trade to get out of risky positions during periods of volatility. But, especially with the 5 minute binary options, it's seriously inflating the daily volume. It's quite the joke. While I know you have a vested interest of having an inflated daily volume, you should also consider having a more accurate daily volume. That way you'd get more trust.