Is not MPEx and MPOE separate when it comes to the collateral of contracts? Hence the MPEx profit and MPOE loss in March. In other words, MPEx can continue functioning even if the bondholders have no collateral. It will just be a matter of finding new bondholders, if MP bankrupts himself making bad financial decisions, who are willing to take short positions.
Just because it is hard to find a well capitalized bear does not mean the MPEx service is going to fail; just volumes will greatly decrease until volatility premiums on the options rise, a lot, to compensate the bears.
MP has simply been selling call options too cheaply. He will either learn his lesson and charge higher premiums or run out of bitcoins and no longer be able to collateralize anymore options.
I am not sure why anyone in their right financial mind would be short bitcoin and particularly not at the extremely cheap premiums of the call options on MPEx. But that is what markets are for and the correct prognosticator profits.
Just because it is hard to find a well capitalized bear does not mean the MPEx service is going to fail; just volumes will greatly decrease until volatility premiums on the options rise, a lot, to compensate the bears.
MP has simply been selling call options too cheaply. He will either learn his lesson and charge higher premiums or run out of bitcoins and no longer be able to collateralize anymore options.
I am not sure why anyone in their right financial mind would be short bitcoin and particularly not at the extremely cheap premiums of the call options on MPEx. But that is what markets are for and the correct prognosticator profits.
You are right, at least technically. MPEx (exchange) can of course continue hosting S.DICE and B.BET (and itself) even in the event of MP defaulting his obligations. I see that Matthew is still doing business despite his default last September. I think that takes way more spine than disappearing with the money (like about every bitcoin business so far has done). But it will cast a shadow no doubt, if the operator has a history of default, unless it is meticulously handled.
In the previous world, bankruptcy cleared your debt, but also assets. In the bitcoin world, you can put aside the amount you feel comfortable with, and give the rest to your creditors. I think the bitcoiners don't fully grasp the ramifications. If you give your bitcoins to someone, and he messes up, no matter what happens next, you are poor and he is (probably) rich.
I was watching the last night price appreciation in awe, but also with sadness as I am truly afraid that MPOE cannot deliver this month.
PR has been ominously quiet on this one. Perhaps it would be time to step up and clarify, how deep you are currently swimming..? There maybe richs bears around, willing to take some of their risk if the price is right. Unfortunately, at the present level of communication from their part, almost nobody feels safe having any dealings with them.
