Investing in Mircea Popescu's Options Emporium - page 3.

brendio

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Quote from: copumpkin on March 05, 2012, 02:15:51 AM

Quote from: brendio on March 04, 2012, 07:55:17 PM

Quote from: MPOE-PR on March 03, 2012, 09:39:09 PM

Good news: MPOE now allows short selling of options (calls or puts). Covered only.

bitcoinBull, I think it's called an Emporium there, but anyway. The ability of users to offer their own quotes on contracts is being worked upon and will probably be here by Monday. Maybe you give it a spin then.

^ like! But could you explain more? Do you mean writing options? For example, I have 100 bticoins and I write 100 call options at $5.5 and collect the premium, but potentially have to sell my 100 bitcoins if the price increases. How does this work with holding the bitcoins in escrow?

As far as I can tell, no. This means that you can sell options that you've bought from MPOE at prices other than the ones he's willing to buy them back for, and other people can buy yours at your price instead of his. Since he seems to give an infinite supply of options at his price, though, you don't have much flexibility in pricing

Well, that's not really short selling then, if you're only covering a long position.

copumpkin

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I'm actually a pineapple

Quote from: brendio on March 04, 2012, 07:55:17 PM

Quote from: MPOE-PR on March 03, 2012, 09:39:09 PM

Good news: MPOE now allows short selling of options (calls or puts). Covered only.

bitcoinBull, I think it's called an Emporium there, but anyway. The ability of users to offer their own quotes on contracts is being worked upon and will probably be here by Monday. Maybe you give it a spin then.

^ like! But could you explain more? Do you mean writing options? For example, I have 100 bticoins and I write 100 call options at $5.5 and collect the premium, but potentially have to sell my 100 bitcoins if the price increases. How does this work with holding the bitcoins in escrow?

As far as I can tell, no. This means that you can sell options that you've bought from MPOE at prices other than the ones he's willing to buy them back for, and other people can buy yours at your price instead of his. Since he seems to give an infinite supply of options at his price, though, you don't have much flexibility in pricing

brendio

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Activity: 518

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Quote from: MPOE-PR on March 03, 2012, 09:39:09 PM

Good news: MPOE now allows short selling of options (calls or puts). Covered only.

bitcoinBull, I think it's called an Emporium there, but anyway. The ability of users to offer their own quotes on contracts is being worked upon and will probably be here by Monday. Maybe you give it a spin then.

^ like! But could you explain more? Do you mean writing options? For example, I have 100 bticoins and I write 100 call options at $5.5 and collect the premium, but potentially have to sell my 100 bitcoins if the price increases. How does this work with holding the bitcoins in escrow?

MPOE-PR

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What do you mean finway?

finway

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Short of liquidity...

MPOE-PR

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Activity: 756

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Good news: MPOE now allows short selling of options (calls or puts). Covered only.

bitcoinBull, I think it's called an Emporium there, but anyway. The ability of users to offer their own quotes on contracts is being worked upon and will probably be here by Monday. Maybe you give it a spin then.

bitcoinBull

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rippleFanatic

OK, I see now that you're the sole writer of the options. And I also see that you're the only who sets the prices.

The spreads are way too large. I'd prefer to make my own bid to a market, not buy from you at whatever price you set.

Quote from: MPOE-PR on March 03, 2012, 08:51:52 AM

It's not an exchange bitcoinBull. You get 100% liquidity at the quoted rates.

You call it an exchange on your site. And its not 100% liquidity if you refuse orders that are "too large".

Quote

The system is designed to allow anonymous use of the exchange.
...
I reserve the right to refuse any transactions for any reason (including excess risk load on the book, order too large to effectively hedge etc)

MPOE-PR

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Quote

An improved UI might attract more buyers (which in turn could attract more sellers).

It's not an exchange bitcoinBull. You get 100% liquidity at the quoted rates.

bitcoinBull

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rippleFanatic

An improved UI might attract more buyers (which in turn could attract more sellers).

MPOE-PR

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Hehehe, so you have splendid car security with a proven track record. Geddit? *track* record.

Anyway, add *no accounts* to that list

copumpkin

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I'm actually a pineapple

Quote from: MPOE-PR on March 02, 2012, 02:27:47 PM

Maybe I should also point out that we've been hacked a total of zero times since August 5, 2011.

In other news, I've been hit by a car zero times, since 1984

But I don't doubt that MPOE security is good, since it involves manual confirmation of transactions and no wallets hosted on hosted boxes.

MPOE-PR

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Maybe I should also point out that we've been hacked a total of zero times since August 5, 2011.

finway

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This is great.

MPOE-PR

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Quote

What could be unfair with the IPO,

This is true, at least in principle it could be done. Onefixt and others have pointed this out privately, as a theoretical possibility.

Mircea Popescu isn't buying his own stock however sadly there's no practical way to prove or verify this. Also as a theoretical possibility the owner could tomorrow grant himself another billion shares, or decide on a 50% retainment of funds (which would in effect dilute the shares, at least on the basis of dividend outflow) and so on and so forth. The fact that none of these are happening or will happen is in the end a matter of trust.

Ideally as the price of the stock stabilizes the point will lose its relevance. It seems in a sense a self-limiting problem, and possibly the reason why such a small fraction of MPOE opened the stock sales.

MPOE-PR

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The results of the first round are out.

brendio

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What could be unfair with the IPO, and where it is open to abuse is if MP or an associate were to participate in the IPO themselves. The proceeds of sale of IPO shares go to MP, so MP could send a large sum to the purchase address, knowing that those funds are going to him anyway, and it would push the per share price up and mean that third-party buyer receive fewer shares each.

brendio

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I don't know if anyone is saying it's unfair. The terms are set out up front. Buyers can take them or leave. I'm leaving them for now for some of the above stated reasons. That doesn't mean it's unfair, because MP doesn't have to sell anything to me or sell on my preferred terms. When parties fail to agree on terms, they walk away. It doesn't follow that one of the parties was necessarily unfair.

Unfair would be if one party were forced into a deal or if the terms were changed after purchase, which I don't think is going to happen, since MP seems like a trustworthy guy.

If anyone wants to sell their stocks to me for an agreed price, PM me.

MPOE-PR

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You have IP and you have "brand recognition" within a relevant community, both of which are worth something

Indisputably it's worth something. In fact that's exactly what we're trying to find out: how much?

IP would be tangible, but since it's proprietary and like in all finance, a secret closer guarded than the king's crown it might as well be intangible (in fact, ideally it is intangible hehe). Brand recognition is outright an imponderable.

Overall, the discussion could be summarized something like this:
Step 1 : it's unfair that bonds are inferior to stocks in that they take risks when the stocks take no risks.
Step 2 : it's unfair that bonds are valued on a per-btc value whereas stocks are valued on a total pooled investment basis, so a bitcoin of bonds is a bitcoin of bonds but a bitcoin of stocks could be ten or ten million so there's a huge risk associated with stocks.

Well... which is it? Cause both can't be argued at the same time.

copumpkin

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I'm actually a pineapple

Quote from: MPOE-PR on March 01, 2012, 07:27:16 AM

"Here's this thing with no tangible assets that I own and believe you me that it's worth X dollars." What would you call something of that kind?

Tangible assets aren't everything. You have IP and you have "brand recognition" within a relevant community, both of which are worth something

MPOE-PR

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Fraud? Really? Where did that come in?

"Here's this thing with no tangible assets that I own and believe you me that it's worth X dollars." What would you call something of that kind?

This for one edge of the problem. Now, on the softer approach, "I sell this, and will not take less than Y", the Y is arbitrary and thus almost certainly mistaken. How would you go about establishing it?

Quote

there is no pricing mechanism to ensure that I buy shares if the price is less than 0.73 BTC and don't if it is more than that.

The thing is, if you want to go that way about it you're probably best served trying to get ahold of someone who bought on IPO and buy from them. In other words, you're a 2ndary market buyer, not an underwriter. Nothing wrong with that, but just because you're B rather than A doesn't really make a good case for A not existing.

The alternative process you describe would also work, for sure. It'd be a lot more like a traditional bookbuilding exercise. It'd also carry slightly higher administration costs. Between something like you describe with a minimum of 50-100 BTC buy-in + no guarantee of block fulfillment versus the system actually in place with a 0.1 BTC minimum buy-in + guaranteed block fulfillment MP preferred in the end the latter. Obviously everything is a trade-off, with strong and weak points.

Topic: Investing in Mircea Popescu's Options Emporium - page 3. (Read 26162 times)