Bitcoin price insurance | Bitcointalksearch.org

Window2Wall

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Quote from: odolvlobo on December 29, 2014, 03:33:18 PM

Quote from: finnile on December 29, 2014, 03:20:40 PM

Quote from: wangxinxi on December 26, 2014, 03:36:51 AM

Most of you posses some Bitcoins. If the price goes down, you lose money. Do you need some kind of insurance that will compensate you if the price goes down?

I know of a site coming soon, which will let you lock down your bitcoin at the current price.
And you can convert it back any time at the dollar value.

Perhaps you are referring to these:

Coinapult Locks - https://coinapult.com/locks/info
Bitreserve - https://bitreserve.org/

With both of these websites/companies (as with any other insurance company) you will have counter-party risk, that is risk that the company that you buy your insurance from will not payout their insurance products.

When taking into consideration the number of scams out there that are bitcoin related I would say that buying this kind of insurance product would be NPV negative, even if you assume the price of bitcoin is going to fall

odolvlobo

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Quote from: finnile on December 29, 2014, 03:20:40 PM

Quote from: wangxinxi on December 26, 2014, 03:36:51 AM

Most of you posses some Bitcoins. If the price goes down, you lose money. Do you need some kind of insurance that will compensate you if the price goes down?

I know of a site coming soon, which will let you lock down your bitcoin at the current price.
And you can convert it back any time at the dollar value.

Perhaps you are referring to these:

Coinapult Locks - https://coinapult.com/locks/info
Bitreserve - https://bitreserve.org/

finnile

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Quote from: wangxinxi on December 26, 2014, 03:36:51 AM

Most of you posses some Bitcoins. If the price goes down, you lose money. Do you need some kind of insurance that will compensate you if the price goes down?

I know of a site coming soon, which will let you lock down your bitcoin at the current price.

And you can convert it back any time at the dollar value.

Barabbas0

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Quote from: odolvlobo on December 29, 2014, 01:26:28 PM

Quote from: oblivi on December 29, 2014, 12:40:42 PM

Dude you are supossed to deal with the responsability of lossing the money if you are freely putting it into Bitcoin the first place.

Dealing with the "responsibility of loosing the money" includes hedging, such as buying insurance, options, or futures.

lol, Oblivi has no idea how credit works in relation to financial markets. Hedging actually benefits instruments as it allow investors confidence to invest more funds. I can guarantee you I'll invest more into a married put than I will a naked position.

odolvlobo

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Quote from: oblivi on December 29, 2014, 12:40:42 PM

Dude you are supossed to deal with the responsability of lossing the money if you are freely putting it into Bitcoin the first place.

Dealing with the "responsibility of losing the money" includes hedging, such as buying insurance, options, or futures.

oblivi

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Dude you are supossed to deal with the responsability of lossing the money if you are freely putting it into Bitcoin the first place.

krishatnet

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It is better to insurance bitcoin price as the price is very volatile. People hedge futures in stock market with options.

HeroCat

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This is ok, if you have many BTC, then yes, you can make insurance. I do not know any company, which do that type of BTC price insurance Cheesy

Barabbas0

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Quote from: tyrexs on December 27, 2014, 02:07:53 AM

im just hear bitcoin price insurance, what is that

You should read up on option strategies, but basically, say you own 100 shares of XYZ. XYZ currently trades at $100/share. You want protect yourself against a downturn, so you decide to buy a $95 put contract. That contract gives you (buyer) the right to sell 100 shares (1 option contract per 100 shares) of XYZ at $95 (Strike price) at any point between now and an agreed upon point in the future (expiration date).

The seller has the obligation of taking those shares if you exercise. This is risky, as XYZ could plummet to, say, $50 and now the seller has to buy at $95 and sell at $50. This risk is reflected in the price of the contract.

If XYZ rises, you profit from your shares, but lose the cost of the put contract. If it falls, you get to sell at $95, even if XYZ goes bankrupt.

That's put insurance in a nutshell. There's also calls which give the buyer the right to buy at a certain price. In November 2013 if you could have purchased a $2000 BTC call, it probably would have been extremely pricey, but in early 2014 when the price plummeted you would have only been out the cost of the call contract, instead of holding onto a depreciating asset.

johnyj

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Beyond Imagination

The insurance against theft or lost password is most needed, but unfortunately there is no way to prove that the coins are stolen by others instead of you

tyrexs

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im just hear bitcoin price insurance, what is that

Foxpup

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Quote from: Q7 on December 26, 2014, 10:03:12 PM

Quote from: Barabbas0 on December 26, 2014, 10:35:28 AM

Quote from: Q7 on December 26, 2014, 08:37:17 AM

If a person has 1000 bucks, buy 250 bucks worth of bitcoin. The remaining balance is your insurance *if the price goes down*. If it does happen, use another 250 to buy more. whatever balance remaining is still your insurance in case of a drop. As it goes down further, use that to buy more until you are dry Grin

It sounds silly because if you don't believe in any of these insurance thing, then use the whole of 1000 to buy at the spot price.

You really have no idea how hedging works, do you? I, for one, would value BTC derivatives. At the very least, I expect a lot of attention to married puts.

Hedging is a form of investment insurance. If you bet 250 and pile up another 500 when price goes down, basically that is done to protect your position.

Q7

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Quote from: Barabbas0 on December 26, 2014, 10:35:28 AM

Quote from: Q7 on December 26, 2014, 08:37:17 AM

If a person has 1000 bucks, buy 250 bucks worth of bitcoin. The remaining balance is your insurance *if the price goes down*. If it does happen, use another 250 to buy more. whatever balance remaining is still your insurance in case of a drop. As it goes down further, use that to buy more until you are dry Grin

It sounds silly because if you don't believe in any of these insurance thing, then use the whole of 1000 to buy at the spot price.

You really have no idea how hedging works, do you? I, for one, would value BTC derivatives. At the very least, I expect a lot of attention to married puts.

Hedging is a form of investment insurance. If you bet 250 and pile up another 500 when price goes down, basically that is done to protect your position.

LiteCoinGuy

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In Satoshi I Trust

maybe your answer is "LOCKS" from

https://coinapult.com/

?

Supercrypt

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never thought about this before "bitcoin price insurance"
and how it works?

hdd3go

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Bitcoin insurance ,interesting , and more and more Bitcoin financial instruments are coming true.

Barabbas0

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Quote from: lihuajkl on December 26, 2014, 10:47:46 AM

Quote from: Undermood on December 26, 2014, 10:37:04 AM

Quote from: zetaray on December 26, 2014, 03:43:24 AM

Their is the need for theft insurance, not insurance for bitcoin price fluctuations. Prices going down is usually a time to buy bitcoin.

some business dealing with bitcoin maybe need this service to lock their profit and eliminate the price fluctuation risk specially when bitcoin is under down turn!

this is like a kind of future contracts to hedge the risk! But personal investors can also profit from trading it!

Or like any derivatives contract. One trader's risk is another trader's protection. You can use options for extra leverage (risk) or to move around delta, protecting your downside at the expense of the upside. FWIW, November '13 would be less "violent" if options were available. Put prices would be balanced by those seeking protection or leverage.

lihuajkl

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Quote from: Undermood on December 26, 2014, 10:37:04 AM

Quote from: zetaray on December 26, 2014, 03:43:24 AM

Their is the need for theft insurance, not insurance for bitcoin price fluctuations. Prices going down is usually a time to buy bitcoin.

some business dealing with bitcoin maybe need this service to lock their profit and eliminate the price fluctuation risk specially when bitcoin is under down turn!

this is like a kind of future contracts to hedge the risk! But personal investors can also profit from trading it!

Undermood

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Quote from: zetaray on December 26, 2014, 03:43:24 AM

Their is the need for theft insurance, not insurance for bitcoin price fluctuations. Prices going down is usually a time to buy bitcoin.

some business dealing with bitcoin maybe need this service to lock their profit and eliminate the price fluctuation risk specially when bitcoin is under down turn!

Barabbas0

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Quote from: Q7 on December 26, 2014, 08:37:17 AM

If a person has 1000 bucks, buy 250 bucks worth of bitcoin. The remaining balance is your insurance *if the price goes down*. If it does happen, use another 250 to buy more. whatever balance remaining is still your insurance in case of a drop. As it goes down further, use that to buy more until you are dry Grin

It sounds silly because if you don't believe in any of these insurance thing, then use the whole of 1000 to buy at the spot price.

You really have no idea how hedging works, do you? I, for one, would value BTC derivatives. At the very least, I expect a lot of attention to married puts.

Q7

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If a person has 1000 bucks, buy 250 bucks worth of bitcoin. The remaining balance is your insurance *if the price goes down*. If it does happen, use another 250 to buy more. whatever balance remaining is still your insurance in case of a drop. As it goes down further, use that to buy more until you are dry Grin

It sounds silly because if you don't believe in any of these insurance thing, then use the whole of 1000 to buy at the spot price.

Amph

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the insurance against that is to hold, like always

Foxpup

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Quote from: wangxinxi on December 26, 2014, 05:24:35 AM

Haha, thanks. We will probably release vanilla options by the end of Jan. I just want to know whether people need it. Grin

Yeah, I just found your other thread about that, thereby making my earlier response seem redundant. I've spoken on numerous occasions about the need for vanilla options, and now you're making me put my money where my mouth is. I'll need some time to think about this.

wangxinxi

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Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: Foxpup on December 26, 2014, 05:06:27 AM

Quote from: wangxinxi on December 26, 2014, 03:36:51 AM

Do you need some kind of insurance that will compensate you if the price goes down?

We already have some kind of insurance against that (you should know, you're providing it). What we need is a better kind of insurance, ie, vanilla options. Get to it.

Haha, thanks. We will probably release vanilla options by the end of Jan. I just want to know whether people need it. Grin

Foxpup

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Quote from: wangxinxi on December 26, 2014, 03:36:51 AM

Do you need some kind of insurance that will compensate you if the price goes down?

We already have some kind of insurance against that (you should know, you're providing it). What we need is a better kind of insurance, ie, vanilla options. Get to it.

zetaray

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Their is the need for theft insurance, not insurance for bitcoin price fluctuations. Prices going down is usually a time to buy bitcoin.

wangxinxi

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Founder & CEO of Coinut.com, Litecoin Core Dev

Most of you posses some Bitcoins. If the price goes down, you lose money. Do you need some kind of insurance that will compensate you if the price goes down?

Topic: Bitcoin price insurance (Read 1774 times)