Topic: [BitFunder] My name is Bond. MPOE Bond. ( Jan: 9.99%, Feb: 4.8% Mar: -23%) (Read 9060 times)

xkrikl, good questions btw...

Rini17, why do you keep calling this BS a "bond"?

Bond is a loan - loans are usually paid back with interest. If borrower (Popescu) loses money, it's not lenders (Your) problem per se, loan has to be paid back regardless of his losses.

You guys are giving your money to a spammer from Romania, who has zero! real life experience with options trading. To make it even more absurd, your money is gambled away by a software/script aka bot, written by that same same guy with no RL experience. 
Did you expect this magical bot to be smarter than buyers of those constantly underpriced options of his?

This is cold hard reality, that anything that purports to provide cover to btc/usd derivatives gets a loss occasionally btc-wise (otherwise it is a scam). Bitcoinica/bitfinex/icbit users get force liquidated, too, often much more than this 23% loss. I really did not expect this to go so badly, but anyway decided to split my investment again approx. 60% to bonds and 40% to call options, and went out unscathed. So I can confidently say it's not Mircea who profited from this.

It would be possible to change MPBPT so that it too tries to hedge using options, but it's really hard to come with solid strategy, that 60/40 one can fail spectacularly when price is stable.

- MPOE bond isn't USD denominated.
- in April the BTC/USD price didn't go in one direction only - still huge loss
- the bot is incompetent ... and the fact that when we've seen March results there was no way out for April investment makes this second loss painfull but expected
- question is if the bot's incompetence isn't intended ... and how much MP made on this
- I don't expect anyone covering these bonds which can simply be made to loose again
- at least I won't offer a single satoshi to cover this unless I'm reimbursed for these losses which I can't imagine

Usagi, if you have another wild theory about ART, please take it where it belongs (garbage can) and stop thread crapping.

BTW, usagi is not only investing blindly (he pissed away over 7000 btc of investors money in GLBSE)  but he ha no idea wtf "company value" means.  
Or more precisely, concepts "like currency" risk are completely alien to our beloved Japanese princess Oliver... oops.. usagi.

LOL

You're right that there is a lot of uncertainty here. For example, I thought they were invested into spreads on the price of bitcoins -- but it looks like I was wrong?

Anyways yeah, and S.DICE isn't the hottest investment these days either. Full disclosure, I am invested in both MPOE and S.DICE -- but not the bonds

You do realise MPOE bond isn't dollar denominated?  The problem is you're investing blind - you have no idea of the competence of the bot's algorithm (apparently insufficient as MP has been tweaking it), you're also investing blind for interest rates, and as you point out you tend to be exposed to severe market moves in one direction when writing options.

Given the trust in MP and other blindness involved it's difficult to see much rational value proposition here, unless monthly rates are extremely high (say 25% or more, even then you'd be down over the last year I think if you calculate the compounded return).  I suspect MP is going to have to stump up most of the capital going forwards; or perhaps there are still plenty of people lining up to play something with worse odds that Satoshi Dice.

If you invest money into something that is tied to US dollars and BTC rises in value, you will lose money priced in BTC. The same thing happenes whether or not you purchase a kiln in LTC (yes, ART on LTC-GLOBAL), an LTC bond denominated in BTC, mining hardware or mining bonds (i.e. BMF, CPA, GIGAMINING, YABMC etc.) or even the outright purchase of a call on BTC denominated in us dollars. That's why it was not logical to complain when your own company ART lost 99.5% of it's value.

Back in August IIRC, MPOE Bond lost 46%. Just like BMF. And now they lost like 30% and 25% back to back. C'est la vie. I think it's time that investors here face the reality that BTC is not a magical shield against investing into a US dollar denominated asset, and that when you invest in something you no longer hold BTC, but the asset you have invested in. So when people say that they lost money in something like MPOE Bond that isn't really true. They didn't gain or lose any MPOE Bonds. But the MPOE Bonds themselves are not worth as much as before. That's just a fact. And when you get served your .18 BTC on the dollar, you should say to yourself "Hey, that's worth $23 now, twice as much as I invested!". Not "Shit I just lost 80% of my money". One of these feelings is logical -- one is not.

What happened here was not special. It was predictable. I myself sold out of CoinBr.MPBPT-O back in March because I saw it coming. I sold out at about 0.102 (at a profit). And, as much as I would love to say "ha ha" to MPOE-PR, the fact here is that this is not their "fault".

What happened is simple and easily explained. As the price rose, MPOE Bond wrote/sold and had executed more and more calls at a loss. Lesson learned: Do not invest in MPOE Bond if the price is expected to move in only one direction throughout the month. OTOH stable prices or volatile prices in a trading channel will likely be more profitable.

CoinBr.MPBPT-E April liquidated for 0.07650118 per share.

CoinBr.MPBPT-O May will not proceed with bond investment due to lack of interest (and no partner to enable us to meet 100BTC minimum). Raised funds were returned (0.1 BTC per share).

Further plans are under consideration.

Since MPOE bot uses average price from bitcoincharts, and it's unavailable, there are no quotes and checking the new pricing is not possible at the moment. However, this is also good opportunity for everyone to place your own options on MPEx. CoinBr users are welcome to inquiry via email, PM or irc, we can create options for you manually. Basic information.

So you are saying that the smartest Romanian on the planet, aka spammer Mircea Popescu, managed to write a "trading" bot, that lost another pile of BTC while trading options on the exchange he named after himself? Talk about vanity... LOL!

I think you guys need to give this pompous sociopath and narcissist another 10 000 BTC, so he can rip you off for the third time.
But... maybe Mircea Popescu dumb bot gets lucky this time? You never know.
Will greed and stupidity prevail?

Another wild month with price instability causing 36% EDIT: 23.5% (my mistake) loss to bondholders. MPOE statement.

The commentary mentions MPOE pricing model was now improved, and says:

As the sales of CoinBr.MPBPT-O May were weak so far, we have preliminary agreement with other parties to jointly buy May bonds. If they don't succeed, CoinBr.MPBPT-O shareholders will be refunded by 0.1 BTC per share on Monday.

That's correct EskimoBob. Please look at the whole sentence however, I mentioned that.

"MPOE does own bitcoin in the form of bondholders covering the losses".

Overall returns have being heavily negative. I'm not putting any coins in mpoe bonds.

Peter, getting acquainted with the elementary terminology is a must
Who ever wrote that https://bitcointalksearch.org/topic/m.782987 needs to do the same. LOL.

Problem is, MPOE owns NOTHING. BTC is borrowed from you with no obligation to return the principal nor interest earned. Basically you are the one who wrote all those cheap Calls while bot was playing with your BTC.

March 2013 MtGox BTC:USD market looked like this:


If bot wrote a Put option, you did OK because most of those probably never made any money for the buyers while writer keeps the premium.
If bot was writing Calls, most of those where "in the money" in matter of days or even hours and you basically sold your BTC at strike+premium-bot fee.

naked = not owning the underlying instrument.

In this case, MPOE does own bitcoin in the form of bondholders covering the losses.

What is naked? Maybe I just don't understand what you mean by naked?

They are naked but are covered by the bond holders, which is in BTC, so not naked?

I am not sure why you are having such a hard time understanding what is going on here? The people with btc buy the bonds to fund the bot's trading. If the bot makes money, then a portion of that is payed back with the principle to the bondholders (IIUC, the rest of the profit goes to MP?). If the bot loses money, then the bondholders get back less money than they paid in, like last month when they got back 0.77 btc for each 1.0 btc they put in.

Which securities is it you believe options are being sold on?

let me put you back to your misery...
If you do not hold the underlying _security_ while you sell a call option, you have sold a NAKED call. Period.