Since most people here are interested in mining it would be more interesting to have calls on the difficulty and not puts.
Yes. It would be interesting to see the opposite.
I'm tempted to offer both calls and puts for a small amount, so you may be able to free roll for a small amount of Bitcoins just to see if there is interest.
What would anyone pay to get paid 1 BTC if difficulty is over:
1) 140M
2) 145M
3) 150M
4) 155M
On the put side:
1) BTC 0.85
2) BTC 0.5
3) BTC 0.2
4) BTC 0.05
On the call side:
1) BTC 0.05
2) BTC 0.1
3) BTC 0.25
4) BTC 0.5
I for one would love a real BTC futures market that will allow you to hedge the investment in hardware. It's kind'a tricky how you would create a covered short though without the ability to directly trade the hashrate. We first need a hashrate index fund and then an option market on top of that. How to arbitrage the index fund against actual hashrate though?
I'm not sure you really need to have an index to the hashrate, instead, you could have a 1/x payout, which has a fixed downside. Miners only need a fixed payout (recover their investment) to hedge, they don't need unlimited upside. Once the difficulty raises past the point of profitability, they are done.
I'd like to set up a futures market for this kind of thing, although it will be pretty manual and small stakes at first. If there's sufficient interest, I can build it to be more automated market.
I think for the next increase, I'll throw out some small bets on this, likely with a .1BTC payout, in the 20-40% increase ranges, and let people bid on the contracts. If they get a great price, good for them!
