Topic: Investing in Mircea Popescu's Options Emporium - page 5. (Read 26180 times)

Bonds are usually above stocks in the capital structure. These
bonds are not.

{random_cat} oh… but my issue is that the ’stocks’ seem to be
senior to the ‘bonds’. that is all…. nothing against either particular
gamble.

[...]

{mircea_popescu} no. looky : in december we have net receipts
141.516650950 BTC payments 138.559309400 BTC. that leaves 3 ish btc to be
split. the bondholders get it all. if there was more than what the
bondholders got, it’d have been split up to shareholders, as for instance
in november : receipts 262.208804500 BTC, payments 46.154494050 BTC. this
leaves a 216 btc to be split up. bondholders get (with a 2% rate) 18.5 BTC
over their less than 1k capital. the remainder is split up to
shareholders.
{random_cat} ahh.. ahh… i was misreading the capital expenses

{mircea_popescu} yeh. the bond interest goes in there accting wise, but
otherwise, it’s … you know, bondholder’s payout. so really, to possibly
better translate this in financial english : there’s a preferred class A
which has fixed dividend and a nominal value of 1 BTC and there’s a
preferred class B which gets remainders and has no nominal value. called
bonds and stocks respectively for the hell of it.

[...]

{mircea_popescu} you’d say the fact that bond expenses are put in the
expense acct prominently doesn’t carry this point ? i mean, stocks get the
profit divided. profit is receipts-expenses. bond expenses qualify, ergo,
senior.

Interesting service. Seems fairly legitimate, and the guy has reputation. Not to mention it looks like he knows what he's doing- but why are you posting instead of him? Haven't heard of him and his service until today but he seems to be profitable. Either way it looks like he's pulling a lot of steam, so if the BTC community trusts him I guess that's good enough for me.

I think I'm going to have to keep an eye on this, seems like a very good investment.

That's a pretty crazy structure. I'd love to invest, because there's definitely money in it and a great need for a derivatives market (I loved playing on bitoption when it was around). But the risk reward equation for that structure is all out of whack.

For the stocks, you have no way of knowing beforehand how much of the company you are buying and how much you are paying. It seems more like an annuity. I think it should be offered through a bookbuild structure.

The bonds has limited upside and potentially unlimited downside. Usually the stockholders take a loss in full before the bond holders make any loss. In that case, I would invest. As it is, the most I can make is 2%. The most I can lose is 100%.

Umm, this is non-standard options invariant
In order to play with aim to gain some money
One must develop some non-standard profitability calculator.
 It can be tricky task.

Actually it says your risk is zero as far as losses:

"Their owner(s) are not responsible for any net loss resulting from MPOE activity, but are entitled to a fraction of the net profit of each month equal to the fraction of total stocks they hold."

Don't buy any champagne in the winter months.

That's a pretty crazy structure. I'd love to invest, because there's definitely money in it and a great need for a derivatives market (I loved playing on bitoption when it was around). But the risk reward equation for that structure is all out of whack.

For the stocks, you have no way of knowing beforehand how much of the company you are buying and how much you are paying. It seems more like an annuity. I think it should be offered through a bookbuild structure.

The bonds has limited upside and potentially unlimited downside. Usually the stockholders take a loss in full before the bond holders make any loss. In that case, I would invest. As it is, the most I can make is 2%. The most I can lose is 100%.