Topic: icbit.se futures "allowed range" (Read 1157 times)

The actual settlement day, as by the spec of that futures contract "BTCUSD-12.12"

see https://icbit.se/BUZ2

I see, and I saw it as the session changed a little earlier, made 3 bitcents, and what is the significance of december 15th? I see there is 12.12 (dec 2012?) in the "instrument" but nothing about the 15th.

Just to remind you of the basic idea: if you "buy", what you do is to promise to use a certain amount of bitcoin for buying $10 at 15.December 2012. You promise that now and are ready to place some BTC immediately as collateral. And you will be willing to take those bucks (the commodity you're buying) in December. But for the deal actually to happen, another participant in the market needs to say "ok, that price sounds OKish, I'll be selling 10 Dollars at 15.December for that rate. And so on.

You might be buying more future contracts, and your overall position will increase, you may sell future contracts, and your overall position will decrease, or even become negative (i.e. you turn from a dollar buyer to a dollar seller). All your various deals together make up an average rate (personally for you).

In your example, if you buy 1 contract at the lowest, you promise to buy $10 for 0.821 BTC (10 * 1/12.18). Thus, immediately 0.78 BTC +fee will be taken from your currency account, your position will be 1 contract and will be accounted at the rate 12.18

Now, to continue your example, lets assume the BTC and the futures market move up considerably. So, when the new session starts  the  current price will be at, say 13.60. Effectively this means, you will now need fewer BTC to buy $10. To be precise, you only need 0.735 BTC now. Thus, your position will now be marked to market: You get the difference of +0.086 BTC credited to your currency account as an immediate gain, and the effective rate of your position is now accounted as 13.60

Of course, you can any time close out your position by making a sell, and hopefully you're able to sell at a higher rate.....

Hmm, If I buy at the lowest (12.18), and the price goes above the highest (13.46) what happens when the range changes to the new higher range?

Same in inverse (selling high and it goes down)?

I guess I mean, if I buy now, will they be there until I sell them, or until the next session?



EDIT - okay I see now

so... its daily?

jesus thats a long time in bitcoin time.

It's typical for futures trading. Some third party explanation: http://commodities.about.com/od/glossary/g/limit-up-down.htm
The only problem right now is that the range seems too narrow. I think we'll enhance it from 5% to 7% into both sides.

I was also puzzled about that feature initially. "Fireball", the representative of that platform explained it as a means to protect against too heavy movements and thus possible margin calls / losses. Basically, once a day a new "trading session" is opened. Each session has a session number, you'll see that session ID in the logs. At start, your current position is "marked to market". This means, the difference of your position's rates and the current effective rate at ICBIT is payed / charged to your money account, and your position is set to the current rate. Then, the new trading range for that session is established. Thus, since eveyone is forced into that range, the futures market can't move as quick as the underlying maket. This is intentional.


See here: https://bitcointalksearch.org/topic/m.1043162

Why does the price of the order need to be within that range? and when does the range change/how is it set?