ASICMINER: Entering the Future of ASIC Mining by Inventing It - page 1086.

Cozzie

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Quote from: friedcat on May 16, 2013, 08:47:07 PM

About the argument of dividend payments, our view is that we will distribute the net income after necessary costs are excluded and funds for foreseeable future (expansion, gen-2 chips) are reserved. Bitcoin is already an investment itself having a great potential. Any investment, no matter how profitable, based on "turning Bitcoins to fiat first" requires double consideration. We can invest the RMBs to bonds and they are almost bound to be more profitable than just holding the RMBs, but we can never say the same to Bitcoins.

Would someone reword/explain to me what did he mean? I am slightly lost at the issue and his explanation.

helixone

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Quote from: stripykitteh on May 19, 2013, 08:13:09 PM

Quote from: stslimited on May 19, 2013, 02:20:34 PM

I want ASICMiner to hedge their production buy selling futures contracts against the bitcoin-fiat exchange rate.

Can a futures market be established in china or hong kong?

I'm not saying you're wrong, but perhaps you haven't explained your concern adequately.

When their markup on product is so high, and the likely direction of the exchange rate long-term is positive, what would this achieve?

I think if the exchange rate of btc:usd tumbled all that would happen is AM would sell loads more hardware as it would be a no-brainer for the GPU crowd to switch. They might even jack the prices up a bit more.

I'll also add that since AM doesn't actually hold any spare BTC other than what they need to sell for operations, nor are they engaged in the practice of trading/selling btc, but rather distribute the vast majority of the mined coins directly to their shareholders, that realistically, they have nothing to hedge.

If shareholders in AM want to hedge against the value of their future earnings dropping, they are free to do so, but as it stands, the attractiveness of an investment in AM is in a pure play btc asset.

If you want an asset that tends to move inversely to the direction of usd/btc, take a look at something like sdice.

I'll also add for those claiming that spreading your money around in different mining stocks is hedging, it isn't. That's called diversification within a sector, and provides no hedging whatsoever.

-helixone

stripykitteh

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Quote from: stslimited on May 19, 2013, 02:20:34 PM

I want ASICMiner to hedge their production buy selling futures contracts against the bitcoin-fiat exchange rate.

Can a futures market be established in china or hong kong?

I'm not saying you're wrong, but perhaps you haven't explained your concern adequately.

When their markup on product is so high, and the likely direction of the exchange rate long-term is positive, what would this achieve?

I think if the exchange rate of btc:usd tumbled all that would happen is AM would sell loads more hardware as it would be a no-brainer for the GPU crowd to switch. They might even jack the prices up a bit more.

arklan

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Quote from: Caesium on May 19, 2013, 08:01:22 PM

Quote from: vortex1878 on May 19, 2013, 07:20:04 PM

The concept of course is completely bs. I will not call names but some "Hero" posters here (especially in this thread) are a joke.

Sheesh, it's only an automatically assigned title based on number of posts. If it was renamed to "OAP Member" to be more in fitting with the previous titles (Jr, Sr) would that make you feel better? Get over it Tongue

OAP? obscense average posts? *smirk*

how about "member needs a life?"

stslimited

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Quote from: Aureum_Coffee on May 19, 2013, 03:15:02 PM

Quote from: stslimited on May 19, 2013, 02:20:34 PM

I want ASICMiner to hedge their production buy selling futures contracts against the bitcoin-fiat exchange rate.

Can a futures market be established in china or hong kong?

A good idea to bring in more options and financial products to table.

There is serious risk, however, with futures contracts.

With futures contracts, one can create derivatives, and then create credit default swaps. These are very potent and powerful tools to manipulate Bitcoin values to fiat currency rate. We can't ever escape the fact we have to exchange Bitcoin to fiat currency to pay for electricity, product shipping, airplane tickets for bitcoin conference, etc.

Futures contracts allow leverage, and allow relatively few people to manipulate quantifiable "things". The ASICminer share price is quantified with numbers. BTC/USD exchange rate is quantified with number.

Futures plus thinly traded market equals easy manipulation.

all I read was powerful, potent and leverage. What was your concern exactly?

Caesium

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Quote from: vortex1878 on May 19, 2013, 07:20:04 PM

The concept of course is completely bs. I will not call names but some "Hero" posters here (especially in this thread) are a joke.

Sheesh, it's only an automatically assigned title based on number of posts. If it was renamed to "OAP Member" to be more in fitting with the previous titles (Jr, Sr) would that make you feel better? Get over it Tongue

Aureum_Coffee

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Quote from: matt4054 on May 19, 2013, 05:30:44 PM

I think ASICMINER is the greatest Bitcoin investment at the moment, but I also think that the prices are too high right now to invest more than a couple of shares with some risk.

About hedging, shareholders can do it on their own with other ASIC companies. I sold about 1/4 of my shares very high yesterday to hedge the risk and buy BASIC-MINING shares with the proceeds. They have an AVALON batch 2 pending delivery and another batch 3 order on the way so I think if you are looking of another mining security with a good potential, that is not overvalued right now, it is worth making it some % of your portofolio on btct.co. And there are others, too.

Anyway, it's really nice to see that stock price above 2, and I will hold most of my shares for sure. I just wouldn't buy more at the current price. But I wouldn't call you silly if you did Wink

Agree with hedging. To build on what you said, here is another one of many ways of hedging. That is to write covered calls at BTC-TC. A covered call will reduce your purchase cost, therefore reducing your capital at risk. Hedging partially.

Another way of hedging is to figure out ASICminer stock beta, and purchase a security that has a beta value completely opposite of ASICminer share. Suppose ASICminer share has beta of 1 in relation to BTC/USD, then purchase a security of -1 will complete the hedging.

Hedging is done when you achieve a beta neutral status or a net beta equals zero in regards to a basket of securities. With beta neutral, the only way *not* to profit is having a static market. A static market is no shares changed hands and no share price movement. Static market is impossible given BTC's volatility.

vortex1878

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Quote from: ThickAsThieves on May 19, 2013, 07:09:46 PM

Quote from: parseval on May 19, 2013, 07:03:53 PM

Quote from: ThickAsThieves on May 19, 2013, 06:47:43 PM

Your site/signature needs a tip address Wink

Good idea! I've done that.

Tip sent: https://blockchain.info/tx/40ed33fe25445d782c3ad34e258ce5e6dde218c1129e1dec4ccdf4d33dd54b55

A fitting post for me achieving "Hero" status! 500 posts

Mabrook! For what I am reading of you, you absolutely deserve it.

The concept of course is completely bs. I will not call names but some "Hero" posters here (especially in this thread) are a joke.

parseval

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Quote from: ThickAsThieves on May 19, 2013, 07:09:46 PM

Tip sent: https://blockchain.info/tx/40ed33fe25445d782c3ad34e258ce5e6dde218c1129e1dec4ccdf4d33dd54b55

A fitting post for me achieving "Hero" status! 500 posts

Thanks! And congratulations on the Hero status.

freedomno1

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Learning the troll avoidance button :)

Quote from: ThickAsThieves on May 19, 2013, 07:09:46 PM

Quote from: parseval on May 19, 2013, 07:03:53 PM

Quote from: ThickAsThieves on May 19, 2013, 06:47:43 PM

Your site/signature needs a tip address Wink

Good idea! I've done that.

Tip sent: https://blockchain.info/tx/40ed33fe25445d782c3ad34e258ce5e6dde218c1129e1dec4ccdf4d33dd54b55

A fitting post for me achieving "Hero" status! 500 posts

Gz on 500 just eating through these posts here

ThickAsThieves

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Quote from: parseval on May 19, 2013, 07:03:53 PM

Quote from: ThickAsThieves on May 19, 2013, 06:47:43 PM

Your site/signature needs a tip address Wink

Good idea! I've done that.

Tip sent: https://blockchain.info/tx/40ed33fe25445d782c3ad34e258ce5e6dde218c1129e1dec4ccdf4d33dd54b55

A fitting post for me achieving "Hero" status! 500 posts

parseval

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Quote from: ThickAsThieves on May 19, 2013, 06:47:43 PM

Your site/signature needs a tip address Wink

Good idea! I've done that.

miTgiB

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Du hast

Quote from: matt4054 on May 19, 2013, 05:53:02 PM

Quote from: ThickAsThieves on May 19, 2013, 05:43:06 PM

What you did isn't a hedge, it's selling one thing to buy something else that is less valuable. Where's the hedge aspect?

Basically, I made a profit by selling some of my ASICMINER shares high (I think, time will tell), while I bought them much lower. And I still hold 75%.

That profit is for sure. Now I speculate that the BASIC-MINING stock price will rise when AVALON batch #2, then #3 ships. On the other hand, I think that there are chances that ASICMINER shares stock price goes lower than the current price (that what I call a small risk => hedge the risk). All in all, I hope to maximize my profits by doing so, while minimizing my risk if something very bad were to happen to ASICMINER

It's unlikely, and I hope not, as 3/4 of my assets are in ASICMINER. But now I have at least 1/4 invested elsewhere. Do you get my point? I'm not telling it the best strategy, I just sharing my thoughts... and holding 100% is perfectly OK, not saying the contrary.

This isn't a hedge at all, but diversifying after a large run up. This happens to be a popular topic currently at The Motley Fool in the 3D, Tesla and Netflix forums, and here was a post someone there pointed out. http://www.fool.com/investing/general/2008/02/01/the-greatest-secret-of-all.aspx

Now I hold ASICMINER and bASIC-MINNING as well as MININGCO.ETF to spread my exposure out, but I have no plans of selling anything, my ASICMINER shares are only up about 200%, so far from what many others have in gains. Anyway, you have a couple of possible outcomes, you took some money off the table and put that to work in something else, for you to actually be right, not only does bASIC-MINNING have to rise, but it has to rise faster than ACISMINER, which you feel is going to pull back, only time will tell, but betting against momentum is not a good bet.

ThickAsThieves

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Quote from: parseval on May 19, 2013, 06:46:16 PM

Quote from: Eric Muyser on May 19, 2013, 04:03:32 AM

Quote from: ?? on ??

I think someone just cashed out from btc-tc and moved part of their investment on bitfunder where prices were 0.1btc lower until some hours ago.

I think there's someone who wants to keep the stock price under control and not let the new surge of investors throw the price into a parabolic, crashing it and inciting panic. I wonder who this person could be Wink

Red bars, trying to balance the incline.
Green bars, people getting crazy (and all in between).

When there's not much demand it kind of just idle's as people hold their shares for the next incline. There's very little on either side trying to trade this, just holders and occasional sell offs to keep it balanced. For going long it's an investor dream.

Cool, someone found my charts useful

I like what you did with the bars.

Your site/signature needs a tip address Wink

parseval

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Quote from: Eric Muyser on May 19, 2013, 04:03:32 AM

Quote from: ?? on ??

I think someone just cashed out from btc-tc and moved part of their investment on bitfunder where prices were 0.1btc lower until some hours ago.

I think there's someone who wants to keep the stock price under control and not let the new surge of investors throw the price into a parabolic, crashing it and inciting panic. I wonder who this person could be Wink

Red bars, trying to balance the incline.
Green bars, people getting crazy (and all in between).

When there's not much demand it kind of just idle's as people hold their shares for the next incline. There's very little on either side trying to trade this, just holders and occasional sell offs to keep it balanced. For going long it's an investor dream.

Cool, someone found my charts useful

I like what you did with the bars.

matt4054

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Quote from: ThickAsThieves on May 19, 2013, 05:43:06 PM

What you did isn't a hedge, it's selling one thing to buy something else that is less valuable. Where's the hedge aspect?

Basically, I made a profit by selling some of my ASICMINER shares high (I think, time will tell), while I bought them much lower. And I still hold 75%.

That profit is for sure. Now I speculate that the BASIC-MINING stock price will rise when AVALON batch #2, then #3 ships. On the other hand, I think that there are chances that ASICMINER shares stock price goes lower than the current price (that what I call a small risk => hedge the risk). All in all, I hope to maximize my profits by doing so, while minimizing my risk if something very bad were to happen to ASICMINER

It's unlikely, and I hope not, as 3/4 of my assets are in ASICMINER. But now I have at least 1/4 invested elsewhere. Do you get my point? I'm not telling it the best strategy, I just sharing my thoughts... and holding 100% is perfectly OK, not saying the contrary.

ThickAsThieves

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Quote from: matt4054 on May 19, 2013, 05:30:44 PM

I think ASICMINER is the greatest Bitcoin investment at the moment, but I also think that the prices are too high right now to invest more than a couple of shares with some risk.

About hedging, shareholders can do it on their own with other ASIC companies. I sold about 1/4 of my shares very high yesterday to hedge the risk and buy BASIC-MINING shares with the proceeds. They have an AVALON batch 2 pending delivery and another batch 3 order on the way so I think if you are looking of another mining security with a good potential, that is not overvalued right now, it is worth making it some % of your portofolio on btct.co. And there are others, too.

Anyway, it's really nice to see that stock price above 2, and I will hold most of my shares for sure. I just wouldn't buy more at the current price. But I wouldn't call you silly if you did Wink

What you did isn't a hedge, it's selling one thing to buy something else that is less valuable. Where's the hedge aspect?

matt4054

legendary

Activity: 1946

Merit: 1035

I think ASICMINER is the greatest Bitcoin investment at the moment, but I also think that the prices are too high right now to invest more than a couple of shares with some risk.

About hedging, shareholders can do it on their own with other ASIC companies. I sold about 1/4 of my shares very high yesterday to hedge the risk and buy BASIC-MINING shares with the proceeds. They have an AVALON batch 2 pending delivery and another batch 3 order on the way so I think if you are looking of another mining security with a good potential, that is not overvalued right now, it is worth making it some % of your portofolio on btct.co. And there are others, too.

Anyway, it's really nice to see that stock price above 2, and I will hold most of my shares for sure. I just wouldn't buy more at the current price. But I wouldn't call you silly if you did Wink

Aureum_Coffee

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Quote from: stslimited on May 19, 2013, 02:20:34 PM

I want ASICMiner to hedge their production buy selling futures contracts against the bitcoin-fiat exchange rate.

Can a futures market be established in china or hong kong?

A good idea to bring in more options and financial products to table.

There is serious risk, however, with futures contracts.

With futures contracts, one can create derivatives, and then create credit default swaps. These are very potent and powerful tools to manipulate Bitcoin values to fiat currency rate. We can't ever escape the fact we have to exchange Bitcoin to fiat currency to pay for electricity, product shipping, airplane tickets for bitcoin conference, etc.

Futures contracts allow leverage, and allow relatively few people to manipulate quantifiable "things". The ASICminer share price is quantified with numbers. BTC/USD exchange rate is quantified with number.

Futures plus thinly traded market equals easy manipulation.

muyuu

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Quote from: stslimited on May 19, 2013, 02:20:34 PM

I want ASICMiner to hedge their production buy selling futures contracts against the bitcoin-fiat exchange rate.

Can a futures market be established in china or hong kong?

It's a lot simpler to just keep a part of the savings in BTC and a part in fiat. However, Friedcat is very bullish about Bitcoin and that's why he prefers to avoid converting funds to fiat.

So far this strategy has worked remarkably well.

Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It - page 1086. (Read 3917058 times)