Is it safe to break out the 10:1? | Bitcointalksearch.org

guruvan

hero member

Activity: 532

Merit: 500

Quote from: bitcoinBull on March 29, 2012, 04:14:38 PM

The formula above is for a long position, and it is constant. When I first saw the formula, I also thought it would change with the BTC price. But it is constant since the net_value changes proportionally with the bid price.

The units/dimensions (BTC vs USD) are also consistent. The bid has dimension (USD / BTC) and so does the quantity ((net_value - maintenance)/(amount + btc)), therefore it can be subtracted from the bid. Thus the liquidation price is also of dimension (USD / BTC).

Hmm. then this means I am overestimating my risk. Grin

I'm ok with that. (I'm sorry to have mislead people though)

EDIT: K. so my original spreadsheet seems to agree with what my brain sees on the bitcoinica page (so now I'm confused)

-the Margin balance fluctuates with what appears to the the "Bitcoinica BTC sell" price (the exchange price, approx but outside the bid price) and is recorded in USD
-the Tradable balance is based on the above(?) and is also accounted in USD

When I run the bitcoinica helper script, my liquidation price changes with the change in BTC price. (as I have USD and BTC in the currency account) - My free margin stopped fluctuating so wildly when I put some more USD to back the BTC in the currency account.

Am I really just overestimating risk?

stochastic

hero member

Activity: 532

Merit: 500

Quote from: guruvan on March 28, 2012, 03:06:42 PM

LOL. I use 10:1 for safety during volatility.

A couple weeks ago, when bitcoinica had a software error, and liquidated tons of positions, I was saved by the higher margin level. I would have seen my position force liquidated at lower levels. Instead of being liquidated I made money

It seems that many people around here risk far too much on any one position. I am much more tolerant of risk in bitcoin than I am in other trading, but still I won't risk much more than 10% of my equity on a position. (I hit about 12% on the error mentioned above) This gives me a lot of room before I go into severe drawdown.

Going "all in" at any level of leverage is just asking for it. Personally, I highly recommend partially hedging your position with your currency account. Drawdown is highly accentuated if your margin is based on a volatile asset in your account, like bitcoin.

I do it this way as well. I might have 10:1 but I am only using 10% of my account on Bitcoinica. If someone uses all their capital no matter what their leverage is going to get called.

bitcoinBull

legendary

Activity: 826

Merit: 1001

rippleFanatic

Quote from: guruvan on March 29, 2012, 02:22:47 PM

Quote from: Maged on March 28, 2012, 11:42:57 PM

If the math in Bitcoinica Helper is correct, the liquidation price is 4.4913.

bid - ((net_value - maintenance)/(amount + btc)) =
4.75225 - ((475.07 - 189.18)/(982.21337 + 113.21337))

each amount needs to be converted to USD at the base price or the bid/ask price.

The bitcoinica helper shows the liquidation price based on the current BTC/USD price (bid, ask, weighted?, I'm not sure) - however, it's not a constant as it doesn't project falling BTC value in the Currency account (which means a falling margin balance)

In practical usage, the liquidation price on a long position will rise as the bid continues to fall according to the amount of BTC vs USD in the currency account, accentuating the drawdown dramatically.

The formula above is for a long position, and it is constant. When I first saw the formula, I also thought it would change with the BTC price. But it is constant since the net_value changes proportionally with the bid price.

The units/dimensions (BTC vs USD) are also consistent. The bid has dimension (USD / BTC) and so does the quantity ((net_value - maintenance)/(amount + btc)), therefore it can be subtracted from the bid. Thus the liquidation price is also of dimension (USD / BTC).

guruvan

hero member

Activity: 532

Merit: 500

Quote from: Maged on March 28, 2012, 11:42:57 PM

If the math in Bitcoinica Helper is correct, the liquidation price is 4.4913.

bid - ((net_value - maintenance)/(amount + btc)) =
4.75225 - ((475.07 - 189.18)/(982.21337 + 113.21337))

each amount needs to be converted to USD at the base price or the bid/ask price.

The bitcoinica helper shows the liquidation price based on the current BTC/USD price (bid, ask, weighted?, I'm not sure) - however, it's not a constant as it doesn't project falling BTC value in the Currency account (which means a falling margin balance)

In practical usage, the liquidation price on a long position will rise as the bid continues to fall according to the amount of BTC vs USD in the currency account, accentuating the drawdown dramatically.

Maged

legendary

Activity: 1204

Merit: 1015

Quote from: N12 on March 29, 2012, 05:03:54 AM

His long looks too small to me for anyone to bother stop hunting though. If he shopped it, wouldn’t he make it so much that it was worthwhile?

Well, those 1337's sure make it look shopped. I really don't know with Atlas anymore...

N12

donator

Activity: 1610

Merit: 1010

The thread was a good idea to discuss leverage when it was made, but I guess I should not have underestimated Atlas’s stupidity. Now it turned into a contrarian indicator.

Quote from: julz on March 29, 2012, 12:42:01 AM

My guess is that Jon is shorted with high leverage to around 4.20 and is just goading people to attack his fake bull position.

The bid curve is so flat immediately down-side of the monster wall that I don't see how anyone can take this as a genuinely bullish state of affairs.

You really believe in Atlas’s sanity? I’m pretty sure he doesn’t have the ability to be sarcastic or use reverse psychology. He believes what he just said. He also is probably fully aware of what he is doing when he posts such a position.

His long looks too small to me for anyone to bother stop hunting though. If he shopped it, wouldn’t he make it so much that it was worthwhile?

RaggedMonk

sr. member

Activity: 308

Merit: 250

Quote from: ElectricMucus on March 29, 2012, 03:35:13 AM

This Thread is exactly the kind of crap the new forum rules are against.

Exactly. Troll SubForum 2012 - Lets Quarantine this Crap!

On an unrelated note, how awesome would it be if Atlas was actually Satoshi Nakamoto, and that is why he has all these Bitcoins... /conspiracy

ElectricMucus

legendary

Activity: 1666

Merit: 1057

Marketing manager - GO MP

This Thread is exactly the kind of crap the new forum rules are against.

adamstgBit

legendary

Activity: 1904

Merit: 1037

Trusted Bitcoiner

Quote from: julz on March 29, 2012, 12:42:01 AM

My guess is that Jon is shorted with high leverage to around 4.20 and is just goading people to attack his fake bull position.

The bid curve is so flat immediately down-side of the monster wall that I don't see how anyone can take this as a genuinely bullish state of affairs.

notice that after the 5.00$ ask, its even more flat

the monster wall pushed us up 10cents and now look at the bids above 4.6

its looking bullish to me, with or with out this wall

also seeing the ask side grow and shrink grow and shrink all day long tells me it wouldn't take much to make these walls get scared

10:1 long is Crazy ya, but maybe not Totally uncalled for

julz

legendary

Activity: 1092

Merit: 1001

My guess is that Jon is shorted with high leverage to around 4.20 and is just goading people to attack his fake bull position.

The bid curve is so flat immediately down-side of the monster wall that I don't see how anyone can take this as a genuinely bullish state of affairs.

adamstgBit

legendary

Activity: 1904

Merit: 1037

Trusted Bitcoiner

Quote from: Jon on March 28, 2012, 11:59:45 PM

Gentlemen, I have done everything with great focus and intent.

All I can ask is that you continue to act within your own nature.

Atlas!

Your thoughts are so.....Grandiose, High-flying, Space!

and very entertaining Cheesy

Jon

donator

Activity: 98

Merit: 12

No Gods; No Masters; Only You

Gentlemen, I have done everything with great focus and intent.

All I can ask is that you continue to act within your own nature.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: adamstgBit on March 28, 2012, 11:44:36 PM

Quote from: Maged on March 28, 2012, 11:42:57 PM

If the math in Bitcoinica Helper is correct, the liquidation price is 4.4913.

bid - ((net_value - maintenance)/(amount + btc)) =
4.75225 - ((475.07 - 189.18)/(982.21337 + 113.21337))

so he's safe so long as that mega wall holds

Mr. Gorbachev, tear down this wall!

adamstgBit

legendary

Activity: 1904

Merit: 1037

Trusted Bitcoiner

Quote from: Maged on March 28, 2012, 11:42:57 PM

If the math in Bitcoinica Helper is correct, the liquidation price is 4.4913.

bid - ((net_value - maintenance)/(amount + btc)) =
4.75225 - ((475.07 - 189.18)/(982.21337 + 113.21337))

so he's safe so long as that mega wall holds

Maged

legendary

Activity: 1204

Merit: 1015

If the math in Bitcoinica Helper is correct, the liquidation price is 4.4913.

bid - ((net_value - maintenance)/(amount + btc)) =
4.75225 - ((475.07 - 189.18)/(982.21337 + 113.21337))

adamstgBit

legendary

Activity: 1904

Merit: 1037

Trusted Bitcoiner

open up excel and try again if you want

guruvan

hero member

Activity: 532

Merit: 500

Quote from: adamstgBit on March 28, 2012, 10:55:09 PM

Quote from: guruvan on March 28, 2012, 10:51:48 PM

Quote from: adamstgBit on March 28, 2012, 10:42:37 PM

Quote from: guruvan on March 28, 2012, 08:00:52 PM

Quote from: RaggedMonk on March 28, 2012, 07:21:13 PM

edit: did some calculations - Want to force liquidate Atlas for the lulz? Just make the price drop to 4.254

sure you did the correct math? mine says it wouldn't take nearly that.

edit: found this https://bitcointalksearch.org/topic/bitcoinica-zhoutonging-price-formulae-unofficial-56797 < this has the formula for the zhoutonging price

(I love it zhoutong used that phrase!)

k so i did the math

= current bid - (margin balance + unrealized P/L - (base price * amount * 4%)) / amount
=4.7522 -(538.02-61.78- (4.8152*982.21337*0.04))/982.21337
------------------
= 4.45994

The falling price of bitcoin drops the margin balance. This is still not exactly correct.
4.7522 - ((4.7522*113)-61.78-(4.8152*982.21337*.04)/982.21337
= a more rapidly approaching number than most people expect Wink

this is why you should keep USD in your account on a long position.

your formula comes out to -470.. must be something wrong with the ()'s

but i understand what your saying...

so then i'd say 4.5 ish he gets zhoutonged

why bitcoinia! why not show this zhoutong price?

sorry, I just used the given math w/o checking.
4.7522 - ((4.7522*113*10)-((982*4.81)-(982*4.7522)-(4.81*982*.04))/(982*4.81)
bid - (CurrencyAcct_IN-USD!*Leverage)-((position*base)-(position*bid))-(position*base*.04)/(position*bid)

~~That should do it.~~ this number still doesn't look right to me and I'm tired. My spreadsheet works. I'll upload it.

adamstgBit

legendary

Activity: 1904

Merit: 1037

Trusted Bitcoiner

Quote from: guruvan on March 28, 2012, 10:51:48 PM

Quote from: adamstgBit on March 28, 2012, 10:42:37 PM

Quote from: guruvan on March 28, 2012, 08:00:52 PM

Quote from: RaggedMonk on March 28, 2012, 07:21:13 PM

edit: did some calculations - Want to force liquidate Atlas for the lulz? Just make the price drop to 4.254

sure you did the correct math? mine says it wouldn't take nearly that.

edit: found this https://bitcointalksearch.org/topic/bitcoinica-zhoutonging-price-formulae-unofficial-56797 < this has the formula for the zhoutonging price

(I love it zhoutong used that phrase!)

k so i did the math

= current bid - (margin balance + unrealized P/L - (base price * amount * 4%)) / amount
=4.7522 -(538.02-61.78- (4.8152*982.21337*0.04))/982.21337
------------------
= 4.45994

The falling price of bitcoin drops the margin balance. This is still not exactly correct.
4.7522 - ((4.7522*113)-61.78-(4.8152*982.21337*.04)/982.21337
= a more rapidly approaching number than most people expect Wink

this is why you should keep USD in your account on a long position.

your formula comes out to -470.. must be something wrong with the ()'s

but i understand what your saying...

so then i'd say 4.5 ish he gets zhoutonged

why bitcoinia! why not show this zhoutong price?

guruvan

hero member

Activity: 532

Merit: 500

Quote from: adamstgBit on March 28, 2012, 10:42:37 PM

Quote from: guruvan on March 28, 2012, 08:00:52 PM

Quote from: RaggedMonk on March 28, 2012, 07:21:13 PM

edit: did some calculations - Want to force liquidate Atlas for the lulz? Just make the price drop to 4.254

sure you did the correct math? mine says it wouldn't take nearly that.

edit: found this https://bitcointalksearch.org/topic/bitcoinica-zhoutonging-price-formulae-unofficial-56797 < this has the formula for the zhoutonging price

(I love it zhoutong used that phrase!)

k so i did the math

= current bid - (margin balance + unrealized P/L - (base price * amount * 4%)) / amount
=4.7522 -(538.02-61.78- (4.8152*982.21337*0.04))/982.21337
------------------
= 4.45994

The falling price of bitcoin drops the margin balance. This is still not exactly correct.
4.7522 - ((4.7522*113)-61.78-(4.8152*982.21337*.04)/982.21337
= a more rapidly approaching number than most people expect Wink

this is why you should keep USD in your account on a long position.

adamstgBit

legendary

Activity: 1904

Merit: 1037

Trusted Bitcoiner

Quote from: guruvan on March 28, 2012, 08:00:52 PM

Quote from: RaggedMonk on March 28, 2012, 07:21:13 PM

edit: did some calculations - Want to force liquidate Atlas for the lulz? Just make the price drop to 4.254

sure you did the correct math? mine says it wouldn't take nearly that.

edit: found this https://bitcointalksearch.org/topic/bitcoinica-zhoutonging-price-formulae-unofficial-56797 < this has the formula for the zhoutonging price

(I love it zhoutong used that phrase!)

k so i did the math

= current bid - (margin balance + unrealized P/L - (base price * amount * 4%)) / amount
=4.7522 -(538.02-61.78- (4.8152*982.21337*0.04))/982.21337
------------------
= 4.45994

Topic: Is it safe to break out the 10:1? (Read 3709 times)