Topic: ICBIT Derivatives Market (USD/BTC futures trading) - LIVE - page 21. (Read 97654 times)

Hm, indeed, first rule of every developer - never say "it should work", because it won't then

The thing is that API server became inacessible. The error was tracked down and will be fixed, in the meanwhile it's running as it should.

all my stuff is gone. orders, bitcoins, positions.

Safari, cleared cashe and reloaded.  Cannot see orderbook and balances.

Latest FF browser, just updated, cleared cache and still can't see orderbook and balances windows. thanks

In Chrome/Chromium when I click on the Market Depth chart it moves (like a scroll down) but no chart displays.

[Edit: as segabtc reports, nearly no data is displaying, not just this depth chart issue.]

I just deployed a minor update (it doesn't change anything visually), which reorganized javascript code used by the trading platform, reducing number of retrieved .js files and also minifying them.

If something breaks after this one: please reload your browser, if it still doesn't help - clear the cache and reload again, if it still doesn't help - please report here

Oh yes, that's a good test. New people came, and platform usage was about a few times more than usually.

Fireball: Thanks for your clear answer to my questions.

These market conditions must be a kind of stress test for ICBIT 

Speaking about high spreads, Mt.Gox currently has $0.7 spread.

Really it's nearly impossible to do any arbitrage with Mt.Gox's connection today, so sorry about lack of asks in the futures. Hence, I'm going to do some improvements to the Exchange market too, so that both Futures and Exchange (spot) markets would work on ICBIT, allowing for better arbitrage and hedging opportunities. Working with greatly unreliable Mt.Gox's connection is a pain.

As long as one short and one long - they are market neutral, and one account gain would equal other account loss. By the moment one of the accounts reaches critical limit (75% of the reserved amount), margin call happens and amount of open positions gets reduced by usual market orders down to 0 in extreme case. And that person leaves the "market neutral" state. Noone gets cheated, it's quite normal.

Absolutely. Dragging these kind of issues till the settlement would just make it worse and provide false expectations. When profitable position gets reduced, a trader always has the option to re-open the contracts by current market price and, hopefully, continue getting profits. When it's delayed till settlement, he thinks everything is allright and does not doanything, and suddenly realizes that he can't get full profit. That's why we compensated all losses on the previous settlement of BUZ2 contract (thus spending all fees we've got from trading), so that noone felt offended and got their profits in full.

But that is still a gain for the "gaming" trader (I think calling him a scammer is a bit strong).

I.e. I open two positions with 10 BTC margin, one short and one long.  The market moves significantly, one way or the other.  One account gains 20 BTC, the other would have lost 20 BTC but the loss is limited to 10 BTC by available funding.  Net gain 10 BTC.  That gain has to come from someone, either ICBIT if the account was allowed to go negative, or from other traders' profit if there is worst-case closure.

By the way, something like that could soon be very relevant.  I hold a long position (mainly by shorting gold), and liquidity is low during these crazy market conditions.  If bitcoin crashes, I will of course take a loss.  And just like the bid side of the gold order book is empty now, the ask side is likely to be gone by then, making it hard to get out of the market in time.  I am counting on my loss being more-or-less limited by the amount I have on ICBIT.  One one hand, I do not want to risk more money than I already have, but on the other hand I do not want to end up owing people money and not paying.  Do the margin calls on ICBIT protect me, i.e. will the automatic liquidation prevent my account from going significantly negative?

On the flip side, whenever there is a large movement upwards, I risk to get less profit than expected because somebody with a short position is forcibly closed.  That is the rules of the game as stated on the web page, and I have no problem with that - at least not if it happens rapidly, i.e. that I loose the last day or last few days of profit. But I would be very unhappy if this happens at a much later time (for example at settlement) and that I loose weeks of profit, killing my own margin account.

Are my expectations approximately correct?

Yeah, this maybe problematic. As the exchange grows (it's still very very small compared to e.g. MtGox), this problem would not be so important because of bigger quantity of bids/asks.
As for insurance - this is a very interesting thing, but needs some research.

Thanks for the correction.  Why not have fees as an explicit number of ticks, charged in BTC at the price traded?  Would be simpler and avoid the issues you're having.

Wondering if / when we'll ever get any offers back...

Oh, I thought you meant profitable within a single trading session.

Still it might be somewhat problematic for people who use futures to hedge their positions (e.g. if one sells goods for BTC but needs to pay supplier in USD), but I guess they have to live with it.

Have you thought about making futures with guaranteed profit? Maybe via insurance (higher fees) or something like that.

This was heavily discussed before the futures exchange was launched. However, it boils down to the fact that if we want to see futures quoted in $ per BTC, then the variation margin would be transferred in US Dollars. This contradicts the desire to start a real Bitcoin economy, a place where your Bitcoins are put to work, not just another site to gamble on Bitcoin rate and get dollars back. Additionally, this fact brings legal issues (running a futures exchange with US dollars transactions would require licensing, bank accounts, etc etc).

So instead, the futures was introduced which uses BTC per $. However, as you realize, it's easy to convert the price back and forth - just perform 1/x operation, and you have price which everyone is used to.
Also the example helps in understanding this choice.

I was thinking and discussing that with my friends with solid financial background, however when it comes to this configuration, this seems to be the best possible option. Nevertheless, if there are some proposals - I'm all ears.

Bytheway, as for b), the tick size in USD is 0.0001 for this contract, it's not really free floating.

No, not really. The thing is that before going negative, in majority of the cases, scammer's counter-market position will be liquidated (by margin-calling).
However, in the worst case like yesterday, forced trades will occur. And still this won't bring the scammer profit, because scammer's "short" account will not reach negative state, but 0, so money would not be pumped out of nowhere.

So maximum he would get is just slightly reduced profit from "long" minus evreything he had in the "short" account.

Allright, you're nitpicking , but by "profitable position" I mean open position for a user whose total profit for this security over whole trading range is positive.

So if trader lost 100 BTC before, then bought $35, price went to $40 and he/she did not cover losses yet, his position will not be considered for reduction due to non-paying customer.

Well, the idea is that profit on one account isn't limited but loss on another is. Suppose I fund each account with 1 BTC.

If market moves in one direction over several days (and it is often the case with Bitcoin), my loss is ~1 BTC, but my profit might be 2 BTC.

Effectively it is a bet on high volatility.


How so?


Well, Fireball is either dishonest or he doesn't understand how futures work. (LOL!) And neither do you.

Suppose I bought at 40. Then next day futures price went to 35. Then back to 40. My P&L over two days should be 0, right?

Wrong!

It turns out that when price moves from 35 to 40 my position is "profitable" and so it might be forcibly closed "at a very good price", which won't cover my previous loss.

Thus on ICBIT it is possible to suffer loss due to counterparty risk.

It is even possible to have a loss when you should have had profit.


It works only as long as collateral covers price movements.

It doesn't even cover one day maximum move.

You can see price range and initial margin yourself. There is a formula for var. margin. So you can calculate maximum loss.

in practice it won't be that extreme. The scammer in your proposed scheme will loose the collateral on the account developing negative. So basically he can scalp off just from one account what he looses on another one, minus the trading fees. Moreover, if you deal with yourself, using a second account, you're not harming anyone else. Generally speaking, the only damage anyone can do is to prevent other people from receiving the full amount of gains possible due to the market movement.

Thus, in the end, I think, anonymity + leverage plus collateral work perfectly well.