Topic: [DEAL LOCKED IN WITH USER 420] LTC - page 2. (Read 2765 times)
Not gone in the literal sense. Gone in the "abandoned and no longer used" sense.
Is there any scenario where LTC is gone by then? I'm guessing only if a code vulnerability is found and hacked... otherwise it's always worth SOMETHING
I hadn't read the updated OP when I typed my post. I saw it when it was still "can" buy, but I didn't reply until later when I had time. Either way, setting up an options contract as I described it better for both parties involved. It gives the seller a premium for his time that he's comfortable with, and if the LTC doesn't go above $.07, then the buyer is stuck only losing the option premium, rather than being forced to buy $700 worth of LTC that could be worth potentially nothing by then.
I'm not trying to squabble with anyone. I only ever wanted to present how the contracts should have been handled over how they were handled.
I'm not trying to squabble with anyone. I only ever wanted to present how the contracts should have been handled over how they were handled.
Deprived, smoothie did not have "WILL" buy in the OP. He did, however, modify that post to say as such. He originally wanted an OPTION to buy them in January, but changed the wording to get 420 to accept. This changed exactly what kind of contract they entered into.
I simply explained a scenario in which both parties could have been much happier, as 420 would have claimed some funds up front in exchange for selling an OPTION to buy the 10k LTC, as smoothie originally wanted, instead of smoothie HAVING to buy them as he is now.
So yes, in the beginning smoothie asked for an OPTION to buy, essentially trading an option tied to a currency. It's not my fault the wording was changed.
-Moose
I simply explained a scenario in which both parties could have been much happier, as 420 would have claimed some funds up front in exchange for selling an OPTION to buy the 10k LTC, as smoothie originally wanted, instead of smoothie HAVING to buy them as he is now.
So yes, in the beginning smoothie asked for an OPTION to buy, essentially trading an option tied to a currency. It's not my fault the wording was changed.
-Moose
I honestly can say that what I meant to say was WILL buy. Not CAN buy.
I think I made those changes to the OP before you posted in this thread. So technically you were still referencing the changed OP because from your view it said WILL and not CAN.
Deprived, smoothie did not have "WILL" buy in the OP. He did, however, modify that post to say as such. He originally wanted an OPTION to buy them in January, but changed the wording to get 420 to accept. This changed exactly what kind of contract they entered into.
I simply explained a scenario in which both parties could have been much happier, as 420 would have claimed some funds up front in exchange for selling an OPTION to buy the 10k LTC, as smoothie originally wanted, instead of smoothie HAVING to buy them as he is now.
So yes, in the beginning smoothie asked for an OPTION to buy, essentially trading an option tied to a currency. It's not my fault the wording was changed.
-Moose
I simply explained a scenario in which both parties could have been much happier, as 420 would have claimed some funds up front in exchange for selling an OPTION to buy the 10k LTC, as smoothie originally wanted, instead of smoothie HAVING to buy them as he is now.
So yes, in the beginning smoothie asked for an OPTION to buy, essentially trading an option tied to a currency. It's not my fault the wording was changed.
-Moose
It's not a very good deal for 420 given the volatility of LTC, however he can simply buy 10,000LTC right now and lock-in a 10%+ gain in the next year.
Obviously if he has say only 10-20k ltc in 'savings' and he's bullish it would be idiotic to do anything but this.
Obviously if he has say only 10-20k ltc in 'savings' and he's bullish it would be idiotic to do anything but this.
This is one of the standard models that is used to price options contracts.
If you'd actually read the OP before posting a bunch of times you'd have noticed this is NOT an options contract. It's essentially a bet on whether at a specific date the price of LTC will be above/or below a certain value.
There's no option to choose to buy or not.
There's no ability to purchase at point other than the fixed date.
So all your posts about how to calculate option pricing are entirely irrelevant.
This is great, although it's not that big of a deal overall it should contribute some stability. Well done guys.
thanks
I did agree to all the terms and this should go smooth; although it is quite long for my taste (1 year). I'm highly confident Litecoin will be worth a bit more than 0.07 but either way I wanted and took this deal and documented my own evidence of the terms
Electricmucus is correct in that if more people do futures contracts, trade/invest in LTC securities/create merchant accepting LTC businesses LTC will become more valuable and stable.
+1
This thread and the attention our deal is getting alone is good for LTC...oops did I let the secret out
+1
420, what have we started? lol
This is great, although it's not that big of a deal overall it should contribute some stability. Well done guys.
thanks
I did agree to all the terms and this should go smooth; although it is quite long for my taste (1 year). I'm highly confident Litecoin will be worth a bit more than 0.07 but either way I wanted and took this deal and documented my own evidence of the terms
Electricmucus is correct in that if more people do futures contracts, trade/invest in LTC securities/create merchant accepting LTC businesses LTC will become more valuable and stable.
+1
This thread and the attention our deal is getting alone is good for LTC...oops did I let the secret out
EletricMucus,
This is great that two parties were wanting to do a deal like this and it got done, though it does not provide any additional stability for the currency other than one person showing a vote of confidence.
Now, that's not to say that 420 doesn't believe in LTC, because he's stated many times he does and has become very active in the currency. I feel like his deal was a bit of good will to offer support for LTC, but he's technically in what's called a "short" position. He's long LTC (owning them) but short on them because he sold options against it for a set strike above the current price. This means that between now and 1/1/14, according to the trade, 420 believes LTC will remain weak and under $.07. Now, we know this isn't the case with what he's said before, but this is how the trade itself speaks.
smoothie is obviously very long on the prospects of LTC and plans to cash in handsomely down the road. :p
This deal will not affect the price of LTC directly though no matter what happens. This is essentially a "dark pool" (http://www.investopedia.com/terms/d/dark_pool_liquidity.asp) trade that will not do anything substantial for the currency.
\This is great that two parties were wanting to do a deal like this and it got done, though it does not provide any additional stability for the currency other than one person showing a vote of confidence.
Now, that's not to say that 420 doesn't believe in LTC, because he's stated many times he does and has become very active in the currency. I feel like his deal was a bit of good will to offer support for LTC, but he's technically in what's called a "short" position. He's long LTC (owning them) but short on them because he sold options against it for a set strike above the current price. This means that between now and 1/1/14, according to the trade, 420 believes LTC will remain weak and under $.07. Now, we know this isn't the case with what he's said before, but this is how the trade itself speaks.
smoothie is obviously very long on the prospects of LTC and plans to cash in handsomely down the road. :p
This deal will not affect the price of LTC directly though no matter what happens. This is essentially a "dark pool" (http://www.investopedia.com/terms/d/dark_pool_liquidity.asp) trade that will not do anything substantial for the currency.
Electricmucus is correct in that if more people do futures contracts, trade/invest in LTC securities/create merchant accepting LTC businesses LTC will become more valuable and stable.
I probably should've chosen a different word. I didn't mean "scam" in the sense you were going to run off and not pay in the event LTC drops. I understand what you did with the "WILL", and that's nice and all, but the process is all messed up. I understand you're still paying a premium and will pay no matter what. It seems two parties participated in a system they really didn't understand. A deal's a deal, but hopefully anyone on the seller's side will consider my post as reference to develop an outline.
If nothing else, please consider using this site in the future to develop a deal. http://www.mystockoptions.com/black-scholes.cfm
This is one of the standard models that is used to price options contracts.
As an example, I put the current ask price for LTC in ($.062/LTC) for the stock price. I put in $.07/LTC as the exercise price. The time is 1 year. Being that LTC is so cheap, the annual interest rate column is negligible, so I just entered 5 for this. Since LTC is a less accepted and still extremely volatile currency, I entered an 85% volatility rate because of its ability to swing wildly quickly.
After entering all these numbers and clicking the "Calculate" button, the Black-Scholes Calculator estimates a $0.02/LTC option contract fee. I said $.025 off the top of my head as a guess, though that's also the number I myself would have been comfortable with, and not have required the buyer of the contracts to still purchase if under $.07 at the time.
Hope this helps, and I'm sorry I used the term "scammer".
-Moose
If nothing else, please consider using this site in the future to develop a deal. http://www.mystockoptions.com/black-scholes.cfm
This is one of the standard models that is used to price options contracts.
As an example, I put the current ask price for LTC in ($.062/LTC) for the stock price. I put in $.07/LTC as the exercise price. The time is 1 year. Being that LTC is so cheap, the annual interest rate column is negligible, so I just entered 5 for this. Since LTC is a less accepted and still extremely volatile currency, I entered an 85% volatility rate because of its ability to swing wildly quickly.
After entering all these numbers and clicking the "Calculate" button, the Black-Scholes Calculator estimates a $0.02/LTC option contract fee. I said $.025 off the top of my head as a guess, though that's also the number I myself would have been comfortable with, and not have required the buyer of the contracts to still purchase if under $.07 at the time.
Hope this helps, and I'm sorry I used the term "scammer".
-Moose
Apology accepted.
Thanks for the information.
It will be very useful for others and in the future for myself.
Mahalo!
Smoothie
EletricMucus,
This is great that two parties were wanting to do a deal like this and it got done, though it does not provide any additional stability for the currency other than one person showing a vote of confidence.
Now, that's not to say that 420 doesn't believe in LTC, because he's stated many times he does and has become very active in the currency. I feel like his deal was a bit of good will to offer support for LTC, but he's technically in what's called a "short" position. He's long LTC (owning them) but short on them because he sold options against it for a set strike above the current price. This means that between now and 1/1/14, according to the trade, 420 believes LTC will remain weak and under $.07. Now, we know this isn't the case with what he's said before, but this is how the trade itself speaks.
smoothie is obviously very long on the prospects of LTC and plans to cash in handsomely down the road. :p
This deal will not affect the price of LTC directly though no matter what happens. This is essentially a "dark pool" (http://www.investopedia.com/terms/d/dark_pool_liquidity.asp) trade that will not do anything substantial for the currency.
This is great that two parties were wanting to do a deal like this and it got done, though it does not provide any additional stability for the currency other than one person showing a vote of confidence.
Now, that's not to say that 420 doesn't believe in LTC, because he's stated many times he does and has become very active in the currency. I feel like his deal was a bit of good will to offer support for LTC, but he's technically in what's called a "short" position. He's long LTC (owning them) but short on them because he sold options against it for a set strike above the current price. This means that between now and 1/1/14, according to the trade, 420 believes LTC will remain weak and under $.07. Now, we know this isn't the case with what he's said before, but this is how the trade itself speaks.
smoothie is obviously very long on the prospects of LTC and plans to cash in handsomely down the road. :p
This deal will not affect the price of LTC directly though no matter what happens. This is essentially a "dark pool" (http://www.investopedia.com/terms/d/dark_pool_liquidity.asp) trade that will not do anything substantial for the currency.
I probably should've chosen a different word. I didn't mean "scam" in the sense you were going to run off and not pay in the event LTC drops. I understand what you did with the "WILL", and that's nice and all, but the process is all messed up. I understand you're still paying a premium and will pay no matter what. It seems two parties participated in a system they really didn't understand. A deal's a deal, but hopefully anyone on the seller's side will consider my post as reference to develop an outline.
If nothing else, please consider using this site in the future to develop a deal. http://www.mystockoptions.com/black-scholes.cfm
This is one of the standard models that is used to price options contracts.
As an example, I put the current ask price for LTC in ($.062/LTC) for the stock price. I put in $.07/LTC as the exercise price. The time is 1 year. Being that LTC is so cheap, the annual interest rate column is negligible, so I just entered 5 for this. Since LTC is a less accepted and still extremely volatile currency, I entered an 85% volatility rate because of its ability to swing wildly quickly.
After entering all these numbers and clicking the "Calculate" button, the Black-Scholes Calculator estimates a $0.02/LTC option contract fee. I said $.025 off the top of my head as a guess, though that's also the number I myself would have been comfortable with, and not have required the buyer of the contracts to still purchase if under $.07 at the time.
Hope this helps, and I'm sorry I used the term "scammer".
-Moose
If nothing else, please consider using this site in the future to develop a deal. http://www.mystockoptions.com/black-scholes.cfm
This is one of the standard models that is used to price options contracts.
As an example, I put the current ask price for LTC in ($.062/LTC) for the stock price. I put in $.07/LTC as the exercise price. The time is 1 year. Being that LTC is so cheap, the annual interest rate column is negligible, so I just entered 5 for this. Since LTC is a less accepted and still extremely volatile currency, I entered an 85% volatility rate because of its ability to swing wildly quickly.
After entering all these numbers and clicking the "Calculate" button, the Black-Scholes Calculator estimates a $0.02/LTC option contract fee. I said $.025 off the top of my head as a guess, though that's also the number I myself would have been comfortable with, and not have required the buyer of the contracts to still purchase if under $.07 at the time.
Hope this helps, and I'm sorry I used the term "scammer".
-Moose
This is great, although it's not that big of a deal overall it should contribute some stability. Well done guys.
Well anyone who offers you option contracts without an upfront premium on them is an absolute fool, and I'm saying that as nicely as I can. You are taking no risk and only have 100% upside. Meanwhile, any person offering such a contract would be a fool NOT to buy the LTC now to back up the contract, otherwise they risk losing huge sums if it goes up. But, if they DO buy 10k worth of LTC, then they're sitting on a maximum loss of over $600 right now if the coin goes bust.
It's a stupid trade for uneducated investors. Good job scamming someone in BTC a few months back and now someone in LTC.
I suggest anyone else who sees interest in doing business with this guy takes their time and looks into how options are SUPPOSED to work. The buyer of contracts -always- pays a premium. The seller -always- collects one.
420 has now risked ~$600 to win ~$100 with no premium collected on the agreement. 1 year is a LONG time in the options world. 3 months is usually the longest real options traders are willing to stomach. Such a long dated contract is considered a LEAPS (Long Term Equity AnticiPation Security). These carry hefty premiums due to the huge risk of missing upside potential in stocks.
If I were to have done this trade, I would have suggested modeling it as such:
Give smoothie an option to buy 10K LTC on Jan 1, 2014.
smoothie must pay $.02/LTC contract fee ($200) up front. Payable in BTC/LTC or any fiat currency (seeing as how the trade is more than 180 days out, almost anything could be accepted, such as Paypal, because a chargeback before the window closes for them invalidates the contract).
This makes smoothie's breakeven price $.09/LTC on Jan 1, 2014, but as long as it's above $.07/LTC in 2014, he can still exercise it.
This makes 420's cost basis ~$.04/LTC if he buys them up slowly over time (as 10K LTC under $.07/ea isn't even available on BTC-e right now).
smoothie would then have unlimited upside potential in his trade.
420 would have a maximum loss of $400, and a maximum gain of $300. This is much more fair to the seller, as he's only taking on slightly more risk for slightly less money.
-Moose
It's a stupid trade for uneducated investors. Good job scamming someone in BTC a few months back and now someone in LTC.
I suggest anyone else who sees interest in doing business with this guy takes their time and looks into how options are SUPPOSED to work. The buyer of contracts -always- pays a premium. The seller -always- collects one.
420 has now risked ~$600 to win ~$100 with no premium collected on the agreement. 1 year is a LONG time in the options world. 3 months is usually the longest real options traders are willing to stomach. Such a long dated contract is considered a LEAPS (Long Term Equity AnticiPation Security). These carry hefty premiums due to the huge risk of missing upside potential in stocks.
If I were to have done this trade, I would have suggested modeling it as such:
Give smoothie an option to buy 10K LTC on Jan 1, 2014.
smoothie must pay $.02/LTC contract fee ($200) up front. Payable in BTC/LTC or any fiat currency (seeing as how the trade is more than 180 days out, almost anything could be accepted, such as Paypal, because a chargeback before the window closes for them invalidates the contract).
This makes smoothie's breakeven price $.09/LTC on Jan 1, 2014, but as long as it's above $.07/LTC in 2014, he can still exercise it.
This makes 420's cost basis ~$.04/LTC if he buys them up slowly over time (as 10K LTC under $.07/ea isn't even available on BTC-e right now).
smoothie would then have unlimited upside potential in his trade.
420 would have a maximum loss of $400, and a maximum gain of $300. This is much more fair to the seller, as he's only taking on slightly more risk for slightly less money.
-Moose
So I'm to understand that 420 provided an option contract to Smoothie for the right to buy 10k LTC a year from now at $.07/ea, but I see nothing about an option premium?!
I -REALLY- hope that Smoothie had to pay a premium for this "contract" up front. Anyone with even the lightest notion of what options are understands there's a premium collected on such contracts. And to have the currency so near the strike would demand a premium (in my opinion) of at least $.025/LTC paid upfront. $100 profit on $700 in 1 year is horrible. I understand it's a 14% ROI, but 420 should have been paid a premium for assuming the risk of holding LTC for a year in case it becomes another worthless currency. Maybe I missed something, but I don't see a premium for this deal listed anywhere.
I -REALLY- hope that Smoothie had to pay a premium for this "contract" up front. Anyone with even the lightest notion of what options are understands there's a premium collected on such contracts. And to have the currency so near the strike would demand a premium (in my opinion) of at least $.025/LTC paid upfront. $100 profit on $700 in 1 year is horrible. I understand it's a 14% ROI, but 420 should have been paid a premium for assuming the risk of holding LTC for a year in case it becomes another worthless currency. Maybe I missed something, but I don't see a premium for this deal listed anywhere.
Perhaps that is how things should have been done, in the "real world".
The agreement has been made and is locked in with Maged/Greedi as witnesses.
I've done a bitcoin futures contract this same way with Jcpham back in October which was agreed 3.5 months in advance to buy 50 bitcoins at $11.
So I'm to understand that 420 provided an option contract to Smoothie for the right to buy 10k LTC a year from now at $.07/ea, but I see nothing about an option premium?!
I -REALLY- hope that Smoothie had to pay a premium for this "contract" up front. Anyone with even the lightest notion of what options are understands there's a premium collected on such contracts. And to have the currency so near the strike would demand a premium (in my opinion) of at least $.025/LTC paid upfront. $100 profit on $700 in 1 year is horrible. I understand it's a 14% ROI, but 420 should have been paid a premium for assuming the risk of holding LTC for a year in case it becomes another worthless currency. Maybe I missed something, but I don't see a premium for this deal listed anywhere.
I -REALLY- hope that Smoothie had to pay a premium for this "contract" up front. Anyone with even the lightest notion of what options are understands there's a premium collected on such contracts. And to have the currency so near the strike would demand a premium (in my opinion) of at least $.025/LTC paid upfront. $100 profit on $700 in 1 year is horrible. I understand it's a 14% ROI, but 420 should have been paid a premium for assuming the risk of holding LTC for a year in case it becomes another worthless currency. Maybe I missed something, but I don't see a premium for this deal listed anywhere.
Context of the "I accept":
I accept
as long as u dont buy a bunch of ltc bringing the price to 0.07 now
Note that there was an edit to this post one minute before Smoothie acknowledged the deal, so the stipulation "as long as u dont buy a bunch of ltc bringing the price to 0.07 now" is questionable in terms of enforcement. Yes, I know it was a joke, but it was included in the acceptance so I need to acknowledge it anyway, in case it's a problem later.
Quote from: 420
Quote from: Smoothie
I want a contract where I WILL buy 10,000 LTC at $0.07 on January 1st, 2014.
Any takers?
Any takers?
I accept
as long as u dont buy a bunch of ltc bringing the price to 0.07 now
Note that there was an edit to this post one minute before Smoothie acknowledged the deal, so the stipulation "as long as u dont buy a bunch of ltc bringing the price to 0.07 now" is questionable in terms of enforcement. Yes, I know it was a joke, but it was included in the acceptance so I need to acknowledge it anyway, in case it's a problem later.
The provision does nothing. He has no way of knowing I would purchase or have someone purchase for me "now". But given I have no intentions on driving up the price, the provision is irrelevant.
Contract locked in with 420.
See here: http://forum.litecoin.net/index.php/topic,1098.msg6086.html#msg6086
I will buy 10k LTC from user 420 for $700 on January 1st, 2014.
See here: http://forum.litecoin.net/index.php/topic,1098.msg6086.html#msg6086
I will buy 10k LTC from user 420 for $700 on January 1st, 2014.
oh this will be fun.............
wonder why I didn't negotiate a higher price....
Also, as far as a scam investigation, Greedi shall take the lead investigative role here as well. If either side has a complaint, go through him first.
Quote from: Greedi
Quote from: Smoothie
Greedi can be a witness to this contract given he is admin on this site and I am a moderator.
Sure..
+ That I also would like to stand in for Smoothie as NOT being a scammer.. We are talking sometimes over skype etc, so Yes, I know him a bit better then just "my" moderator/slave
If you would like to appeal any action/decision Greedi makes, you can appeal to me if you would like it to not apply to this forum.
Greedi, if you would like any action to be taken here, please tell me what you would like along with a justification and any evidence you have.
Will PM in a moment thanks
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