Topic: [GLBSE] FOO.PPPPT - Perpetual Pure Pirate Pass-Through Bonds - 7% weekly - page 5. (Read 12852 times)

The same criteria that any arbitrageur would use -- "is this trade profitable for me", and there may be many factors going into that decision. I know there are others who have a BTCST account and still hold some of my bonds, for the same purpose of arbitrage and market making. The total number of bonds in circulation doesn't actually affect each individual bond-holder.

I could alternately sell the bonds that I personally hold, put the BTC into the account, and then *not* issue extra bonds to account for it, for the same effect. But this was never intended to be a "limited-issue" bond, and I would like the number of bonds to exactly reflect the value of the BTC in the account. Or would you like me to never sell my share of the bonds at all?

I'm open to discussion about this. But I believe issuing bonds when needed is a way to keep the price of the bonds in check, without having pre-announced bond sales every week.

What criteria do you use when deciding to inject new bonds into the market? Having the issuer randomly inject new bonds into the system and unknown times is fairly disruptive to trading.

Not necessary. If you value TYGRR.P and FOO.PPPPT equally (or adjust their values for interest rates like in my earlier post), but find that TYGRR.P is cheaper than FOO.PPPPT on the open market, you can buy TYGRR and sell FOO directly on GLBSE. Your inventory will now contain more TYGGR than FOO, but the overall number of bonds is the same, and you have gained some BTC in the process. This relies on the fact that you don't care whether you hold TYGRR or FOO, as long as you have some total number of pirate bonds from whatever vendor.

Exactly what I am wondering, do you just trade the bonds OTC with someone else?

If you find TYGRR.P bonds for sale cheaper than some bids on FOO.PPPPT, you can buy some TYGRR.P, sell FOO.PPPPT, and pocket the difference, assuming that the two bonds are fungible. Or if you have direct access to a pirate account, you can sell FOO.PPPPT and deposit with pirate directly. Until GLBSE allows short-selling, it won't be possible to do this unless you are already holding some FOO.PPPPT, but that's the general idea.

That's fine, I was just wondering. 


How do you arbitrage a bond on GLBSE? I'm missing something here... 

From the OP:

This is essentially how I will address any additional demand. I do not intend to issue mass amounts of shares on a weekly basis like Goat. That is more risk than I would want to take on, eg, in the event that I have to buy back all the bonds at some point. I also don't want to send too many coins to pirate because I fear there is a risk of reduced interest rates if we keep doing that.

What I will do instead is arbitrage the bid side from time to time, if there is pent-up demand, and if it is worth doing so. This will not be at pre-announced times, or even guaranteed to happen. This isn't a share of a company where issuing more bonds dilutes the value of existing shares - each bond here is actually backed by 1 BTC in my BTCST account. The floor price can be expected to follow market rates of other pirate bonds. For example, Goat promises to sell his bonds at 1.02 for returns of 0.068 BTC a week. That translates into a clean price of 1.05 BTC for the FOO.PPPPT bond. (Dirty price on any given day will usually be the clean price + accrued interest). Of course, other market participants are welcome to do their own arbitrage as well. I expect the prices of the bonds to follow each other fairly well. As long as others keep issuing more pirate bonds, please do not expect much up-side to this bond either. If pirate stops accepting deposits, that would be a different story altogether.

What.

Not when there's a half dozen comparable offerings trading for much lower prices. The counterparty risk is really the same for all these PPT bonds, so paying 1.249 for these over one of the PPT issues, Brendio's, Goat's, etc would take  a long time to recover that investment.

3.5 Weeks of interest - depending on the risk you want to attach to the underlying security.......still a value.

  Someone really wanted a share.

Yes, for this bond, that is correct. You either buy from others or from me if I'm issuing more. There may be something else in the works for people who want to reinvest though...

No, thank you all for investing! I will come up with a plan to address any further demand.

I guess there will be no way to reinvest dividends unless you count purchasing other's bonds?

Congratulations on a successful IPO!

As far as I know, I hit the sell button exactly on the hour, to the second. The GLBSE twitter feed has the log of all trades.

Thanks to everyone who placed bids. All shares have been sold, and all pre-IPO shares have been transferred. Funds are on their way to BTCST as we speak. There was a fairly big order that came in at the last moment, I'm sorry if anyone got out-sniped by it!

not sure what happened there... i missed out i guess, oh well, over to tygrr.p

Holding out for higher bids now?  Don't like the way this ipo is being handled at all.  Withdrawing bids.

Update:

A total of 1000 bonds will be sold tomorrow during the IPO. This will bring the total number of bonds issued to 2500:

IPO: 1000
Pre-IPO: 1000
Held by me: 500

There are already enough bids on GLBSE to absorb the planned sale of 1000 bonds. I hope this minor change does not disrupt anyone's plans.

I may actually have to issue some extra shares tomorrow, because of a mistake I made in estimating pirate's interest payout. He pays interest based on the average deposit amount in the previous week, for which I believe the cutoff time is 12 AM CST. If I put in 2000 BTC after IPO tomorrow, the average for the week might end up being less than 2000, which gives me only 5.6%, and that leaves me out of pocket (because I've committed to 7% no matter what happens). I'm considering issuing around 500 more (at the same 1 BTC rate), to put us safely in the highest interest rate tier. I am still thinking about this and will confirm shortly.