Topic: how can i hedge my bet (Read 556 times)
have you considered using futures contracts at icbit.se?
makksik
you are right about the trust factor, which would be nearly impossible, but why would a business accept bitcoin when they could immediately lose money on their principle? yes they could make money if the coins go up. any idea how a business that accepts btc would manage their risk other than immediately selling them?
you are right about the trust factor, which would be nearly impossible, but why would a business accept bitcoin when they could immediately lose money on their principle? yes they could make money if the coins go up. any idea how a business that accepts btc would manage their risk other than immediately selling them?
At this point, I would think it depends on the kind of business and how many layers of the supply chain above and below BTC is used as a means of exchange in. We've heard murmurs of Amazon and others accepting BTC in the future, but I highly doubt that would happen if they didn't have some sort of mechanism where they could immediately exchange BTC received for goods at some sort of very liquid exchange that will let them lock in prices for the duration of a transaction (i.e. not hedging of days/months but rather minutes/hours).
In all probability however, I don't believe we will see BTC used directly by large retailers as their payment processors (who are centralized, and as such have the organization and resources to lobby) -- will make the argument that potentially illicit, untraceable funds are being recycled into the normal economy from the underworld of money-launderers, drug-related types and maybe even terrorists... The level of exaggeration and rhetoric will purely be a function of the perceived threat of BTC to these processors,.
I'm sure that in time, currency exchanges like Mt.Gox will offer the ability to go short.
not that i know of
makksik
you are right about the trust factor, which would be nearly impossible, but why would a business accept bitcoin when they could immediately lose money on their principle? yes they could make money if the coins go up. any idea how a business that accepts btc would manage their risk other than immediately selling them?
you are right about the trust factor, which would be nearly impossible, but why would a business accept bitcoin when they could immediately lose money on their principle? yes they could make money if the coins go up. any idea how a business that accepts btc would manage their risk other than immediately selling them?
If you don't like the erratic nature of Bitcoin against fiat currencies, take a look at trading BTC with LTC, the movements are a lot smaller.
If you're asking how do you keep $1000 = $1000 you just keep it as dollars.
Though I suspect what you are looking for is a way to profit from the meteoric rises without being exposed to the falls then msg me when you've worked it out
If you're asking how do you keep $1000 = $1000 you just keep it as dollars.
Though I suspect what you are looking for is a way to profit from the meteoric rises without being exposed to the falls then msg me when you've worked it out
hey pete
i am just wondering how one could stay completely hedged at all times. I would think a currency has to be stable to be adopted. i think at some point in the future this will be done when more exchanges open. there needs to be a way to immediately hedge the coin so when the person/business goes to cash out they have the same amount of money. no more or less. any ideas??
You would virtually always have less as you'd be paying a premium to your counterparty for them to take on the risk of fluctuating prices.
You could remain hedged at all times by entering into a series of rolling forward agreements--however with the volatility inherent to BTC and the lack of debt or swap markets denominated in BTC from which a forward curve could be derived, you're still SOL.
Perhaps as a newly scammed individual (out 5 BTC last night)--I'm still a bit bitter, but the reality is that the success of fiat currencies to date and especially the establishment and development of financial markets (specifically debt and derivatives which are traded OTC) has been predicated almost completely on trust in your counterparties. As trust appears to be anathema to the founding principles of BTC, I believe it will be very difficult to successfully recreate derivative markets for the BTC ecosystem--and as such, I don't think we'll be seeing cost effective ways to hedge (and as a corollary, stabilize BTC exchange rates) for the foreseeable future.
If anyone wants any input or a sounding board to discuss hedging and derivatives--fell free to get in touch--I'm still a newbie here but AFK I might have a clue or two on how these markets work
Perhaps as a newly scammed individual (out 5 BTC last night)--I'm still a bit bitter, but the reality is that the success of fiat currencies to date and especially the establishment and development of financial markets (specifically debt and derivatives which are traded OTC) has been predicated almost completely on trust in your counterparties. As trust appears to be anathema to the founding principles of BTC, I believe it will be very difficult to successfully recreate derivative markets for the BTC ecosystem--and as such, I don't think we'll be seeing cost effective ways to hedge (and as a corollary, stabilize BTC exchange rates) for the foreseeable future.
If anyone wants any input or a sounding board to discuss hedging and derivatives--fell free to get in touch--I'm still a newbie here but AFK I might have a clue or two on how these markets work
CampBX has advanced trading options that you may seek
If you don't like the erratic nature of Bitcoin against fiat currencies, take a look at trading BTC with LTC, the movements are a lot smaller.
If you're asking how do you keep $1000 = $1000 you just keep it as dollars.
Though I suspect what you are looking for is a way to profit from the meteoric rises without being exposed to the falls then msg me when you've worked it out
If you're asking how do you keep $1000 = $1000 you just keep it as dollars.
Though I suspect what you are looking for is a way to profit from the meteoric rises without being exposed to the falls then msg me when you've worked it out
hey pete
i am just wondering how one could stay completely hedged at all times. I would think a currency has to be stable to be adopted. i think at some point in the future this will be done when more exchanges open. there needs to be a way to immediately hedge the coin so when the person/business goes to cash out they have the same amount of money. no more or less. any ideas??
If you don't like the erratic nature of Bitcoin against fiat currencies, take a look at trading BTC with LTC, the movements are a lot smaller.
If you're asking how do you keep $1000 = $1000 you just keep it as dollars.
Though I suspect what you are looking for is a way to profit from the meteoric rises without being exposed to the falls then msg me when you've worked it out
If you're asking how do you keep $1000 = $1000 you just keep it as dollars.
Though I suspect what you are looking for is a way to profit from the meteoric rises without being exposed to the falls then msg me when you've worked it out
thanks for the quick reply guys. so if I cant short btc, who is on the other side of the trade? someone has to make money when btc goes down correct? just like stock you are either long or short, a zero sum game. one person wins the other loses?
What I contemplated, but decided against was to "hedge" BTC with dollars. Make an agreement with someone that if BTC goes below $20 they have to buy at $20 and if BTC goes above $50 they can demand I sell to them at $50.
Of course you can see why I did not go through with this, but you get the idea of the concept.
Of course you can see why I did not go through with this, but you get the idea of the concept.
afaik you cant short, which you could use to hedge your risk
is there anyway to hedge bitcoins so that your total investment neither goes up or down?
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