Topic: ICBIT Derivatives Market (USD/BTC futures trading) - LIVE - page 14. (Read 97699 times)

Hi,

what is the current policy regarding margin requirements? I have position of 161 contracts, which is currently worth 5.7454 BTC and the initial margin is 2.98 BTC.



2.98 out of 5.7454 is 51%, which means that the leverage is only 1:2, not 1:10 as stated on the ICBit futures specification page.

I really do. I'm not earning anything from this yet, all profit went to settle debts of non-paying users and stabilize the market. Risk management improves, attracting market makers, etc etc to make this thing really profitable (as the volume itself is great). After that's done, the fees would be significantly reduced further.

I PMed you.

Hey Fireball,

Do you need some help? I'm not sure if that question has been answered before in the previous 39 pages, I didn't read through them. Please check my request at https://bitcointalksearch.org/topic/m.1793556

I can imagine you're already earning enough to not need to share anything, but I thought it's worth a shot anyway.

The change will go into effect after the clearing. The exact value is going to be determined, to be safe enough not to cause the margin-calls crash.

Non informative. Would be good if you post exact numbers.

Due to extreme volatility we are going to increase initial/maintenance margin for "long" side, starting with BUJ3.
Please add more funds to be able to withstand that increase.

Just to clarify, as other proposed options did not get enough justification by traders, 08:00 UTC is going to be the second clearing time. So tomorrow 08:00 UTC second clearing will happen already.

What on Earth happened at 10:13 this morning

At 9:02:58, I have sold 550 BUM at 150$, this looks like a forced close (the majority of my contracts ).  Then something weird happens: At 10:13:38 I have apparently sold another 550 BUM3 at 155$, and then bought them all back at 10:15:20 at the same price.  550 contracts is somewhat more than I had, so I have been short for 2 minutes.  And why did this result in TWO variation margin lines in the log at 10:13:38?  Was this an erroneous forced closure, or something like that?

I know this extra "clearing" should not affect my profit, since the real clearing happened soon after, regaining the lost money.  But the two variation margin lines worries me a bit, since something clearly went wrong I may have taken a loss for all 550 contracts, and not just for the 300-something that I actually owned?


Edit: spelling.

Until the market making situation is improved, we have to close a lot of open interest today in the BUM3 contract. The BTC/USD rate goes on, and resources of short traders are limited now.

To make the internals of the so-called worst case scenario (https://icbit.se/margincall ) fully transparent and clear:

1. The system looks whether any of the traders crosses negative balance.
2. If yes, the optimal price is calculated per every trader who is in debt. The optimal price means that the user in debt results in 0 BTC on his account.
3.1. These trades are executed either by existing orders in the market (if there are suitable orders), or if there are no suitable orders
3.2. These trades are forcefully executed against traders holding opposite positions. Only those users are selected, who currently hold those contracts, and those, who have made profit by trading this type of contract. Effectively, this is a profit cap. Of course, those "good" traders don't get any trading fees for such trades.

I would like to stress out the fact that noone ever goes with a loss after such forceful settlement. It is a profit cap, and until there is enough liquidity on the market, and until the BTC rate volatility remains that high, it's the only way to survive.

Thank you for understanding. Please help spread the word about market making to help fight these forceful settlements.

And to address the third problem, the problem of liquidity, which concerns many traders of the exchange.

It's very obvious that the liquidity currently is the most important problem which holds further growth of the market. And not only that. It makes risk management particularly difficult, and with the constantly rising USD/BTD rate the sell side of the book gets bought out in a few seconds when sell orders appear.

As a drawback, these days we have to utilize the worst case scenario expressed on this page, because the exchange can pay one side only as much money as the other side has. We often just can not margin call users against the market because the sell side of the order book is empty. This scenario means that profitable (only profitable!) traders realize some profit from their existing position (e.g. if they had some long BUU3 contracts, some of them will be sold, but no fees will be deducted).

I understand it is annoying, especially for greedy traders who are not satisfied with the (rather big) profit they got and complain that they want more :-)

There is a solution for this problem and it's about bringing liquidity to the market, by means of market makers, who would provide liquidity, hedge on the spot market (gox and icbit's one when it grows enough) and get profit from the price difference between spot and futures.

Market makers pool thread is here: https://bitcointalksearch.org/topic/market-makers-pool-sign-up-here-169908

They show exceptionally low trading volume, so I am not sure yet.

The Gold and Oil futures will settle in a week or so.  Will they be replaced?

As part of the risk management strategy, due to higher USD/BTD volatility we are going to gradually increase the initial and maintenance margin requirements, starting from today's clearing.

Please make sure you have enough BTC on your account for your futures position.

Official rules for margin calculation are not published, because it's part of our internal process. But the general idea is to be able to withstand movement of the price within trading session. Right now we use 75% of that value (thus giving a "discount" to users), however due to risks the discount will be reduced.

Thanks and happy trading!

https://twitter.com/icbit_se/status/320632134815584257


At what time will the new clearing be?  08:00 UTC?

I don't think the trade executed by the exchange as margin call is the same as trade between traders. The difference is pretty obvious. No matter that it is within the trading range. It affects the clearing price and needs to be known to the traders to properly calculate the risk.

AFAIK, that margin call was executed within the trading range, so it's the same as any other trade.

Just for clarity and to avoid any claims I would urge to add to the rules that the trade price might be someone's margin call executed by the exchange. I learned that from the clearing price observation as I previously posted. I think it is important for traders to know that they need to take into account that the price might be determined not only by the trades between them but by the exchange executing margin call as well. This affects the clearing price calculated as average as well as the current last price.

I think 1 hour on such weak market still may be manipulated

So during the recent week there were two problems explained:
1. Additional clearings vs. trading ranges.
2. Market manipulation in the last second before clearing.

To address these issues, as it's agreed with community, we plan to implement the following:
1. Perform two clearings per day instead of one (the time of the second clearing is to be determined, but it should not necessarily divide the trading time into exact halves).
2. The clearing price will be calculated as average price for the hour preceding clearing.


It's been enough time for discussion, so the changes may go live starting from monday, 04/08.

If there are any comments, please let me know.

But was this "last trade" an execution of someone's margin call by the exchange itself?