Looking to buy PUT options on ASICMiner

runeks

legendary

Activity: 980

Merit: 1008

Quote from: Lohoris on June 28, 2013, 07:16:32 PM

I've never bought or emitted options so far, but the offer is interesting and I'm considering it.
btct offers 84d (i.e. 12w) options.

However I've made some calculations, and locking 2.3 BTC for a 0.2 premium equals to a weekly gain of 0.01666667, which I think will be lower than the dividend that AM will pay during this period (assuming 0.0290 weekly dividends, that would be 0.01957273 adjusted to what I could buy now with 2.3 BTC), so I could as well buy some AM-PT shares with those coins and have a higher return.

Would you accept either:
• 84d, 2.3 strike, 0.28 premium
• 56d, 2.3 strike, 0.16 premium
?

This calculation assumes that the share price doesn't fall at all after you've purchased. If you make x in dividends from holding ASICMINER shares for 12 weeks, then you only earn this full amount if the share price doesn't fall. Otherwise the capital loss (buying_price - selling_price) would eat at your profit.

If you think the share price won't fall in the following 12 weeks, you can make the same amount of money right now, instead of over a period of 12 weeks, by offering 12-week put options with a strike price of the current ASICMINER price and a premium of expected_average_dividend*12.

So if you think 0.04 BTC/week is a high average dividend (I think it is), then you should be willing to sell 12-week put options for 0.48 BTC per contract with a strike price of 4.24 (current ASICMINER-PT highest bid).

If you do this you could buy 1 extra ASICMINER share, and increase your profit further, if the share price doesn't go down.

So in essence you'd be getting an instant, locked-in profit in exchange for a lack of profit in case the share price increases.

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

Update:

(I am BUYING put options: you write them!)

Strike: 3.3 BTC
Expiration: 90 days
Premium: 0.3 BTC

I will honor this is up to a 4.7 BTC/share price level unless I state otherwise. BTCT only.

Vycid

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

Quote from: Lohoris on June 29, 2013, 05:18:32 PM

Quote from: Vycid on June 29, 2013, 09:28:22 AM

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I would like to buy down, but if I have to keep the strike money locked, I would better invest it now instead...

Considering I'm offering significantly better than the interest rate, you could always borrow money to escrow.

Or if you're a trusted community member we can work something out.

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

Quote from: sebastienurbain on June 29, 2013, 10:37:13 AM

Quote from: Vycid on June 29, 2013, 09:28:22 AM

Quote from: Lohoris on June 29, 2013, 03:40:44 AM

Quote from: Vycid on June 28, 2013, 10:47:20 PM

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I don't get it. Why not just wait until the price goes down and then buy? Wouldn't this be the same?

No. I pay you for that promise (0.2 BTC).

In other news, this train has left the station. Price is at 3.9 so I'm now asking for a minimum strike of 2.7.

Lohoris

hero member

Activity: 630

Merit: 500

Bitgoblin

Quote from: Vycid on June 29, 2013, 09:28:22 AM

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I would like to buy down, but if I have to keep the strike money locked, I would better invest it now instead...

sebastienurbain

member

Activity: 81

Merit: 10

Quote from: Vycid on June 29, 2013, 09:28:22 AM

Quote from: Lohoris on June 29, 2013, 03:40:44 AM

Quote from: Vycid on June 28, 2013, 10:47:20 PM

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I don't get it. Why not just wait until the price goes down and then buy? Wouldn't this be the same?

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

Quote from: Lohoris on June 29, 2013, 03:40:44 AM

Quote from: Vycid on June 28, 2013, 10:47:20 PM

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

Lohoris

hero member

Activity: 630

Merit: 500

Bitgoblin

Quote from: suryc on June 28, 2013, 11:14:59 PM

How do I write puts on BTCT?
I don't see a way to do it. Can someone provide a little guidance?

You click on the security, you go into the "options" tab, and at the bottom there is a collapsed table "Write Options — Please make sure you know what you're doing before writing options...".

If there isn't it might have to do with, I don't know, 2FA maybe?

Lohoris

hero member

Activity: 630

Merit: 500

Bitgoblin

Quote from: Vycid on June 28, 2013, 10:47:20 PM

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

enquirer

sr. member

Activity: 306

Merit: 257

Quote from: Vycid on June 07, 2013, 06:12:52 PM

I will immediately purchase ASICMiner puts expiring September 1st, with a strike of 1.8BTC, and a premium of 0.14BTC.

You can use betsofbitco.in site for that (not affiliated).

suryc

sr. member

Activity: 298

Merit: 250

Play2Live pre-sale starts on January 25th

How do I write puts on BTCT?
I don't see a way to do it. Can someone provide a little guidance?

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

Quote from: Lohoris on June 28, 2013, 07:16:32 PM

I've never bought or emitted options so far, but the offer is interesting and I'm considering it.
btct offers 84d (i.e. 12w) options.

However I've made some calculations, and locking 2.3 BTC for a 0.2 premium equals to a weekly gain of 0.01666667, which I think will be lower than the dividend that AM will pay during this period (assuming 0.0290 weekly dividends, that would be 0.01957273 adjusted to what I could buy now with 2.3 BTC), so I could as well buy some AM-PT shares with those coins and have a higher return.

Would you accept either:
• 84d, 2.3 strike, 0.28 premium
• 56d, 2.3 strike, 0.16 premium
?

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

84 days @ 0.20 is acceptable though (since there is no way to write options for exactly 90 days on BTCT)

What I WILL consider is buying unsecured puts, but you must be a trusted community member and willing to sell at a discount.

Lohoris

hero member

Activity: 630

Merit: 500

Bitgoblin

I've never bought or emitted options so far, but the offer is interesting and I'm considering it.
btct offers 84d (i.e. 12w) options.

However I've made some calculations, and locking 2.3 BTC for a 0.2 premium equals to a weekly gain of 0.01666667, which I think will be lower than the dividend that AM will pay during this period (assuming 0.0290 weekly dividends, that would be 0.01957273 adjusted to what I could buy now with 2.3 BTC), so I could as well buy some AM-PT shares with those coins and have a higher return.

Would you accept either:
• 84d, 2.3 strike, 0.28 premium
• 56d, 2.3 strike, 0.16 premium
?

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

Hey all,

I'm still buying about 7 more ASICMiner-PT put options.

Strike: 2.3 BTC
Exp: ~90 days
Premium: 0.2 BTC

(again, I am buying puts, you would need to write them)

BTCT please. If you decide to list, make sure to send me a PM.

Cheers,

Vycid

Vycid

sr. member

Activity: 336

Merit: 250

♫ the AM bear who cares ♫

I've only gotten one acceptable offer for options so far, so I'm going to raise the premium a little bit. This is firm: do not bother asking for a higher premium/shorter time period/whatever.

I will immediately purchase ASICMiner puts expiring September 1st, with a strike of 1.8BTC, and a premium of 0.14BTC.

3 BTC limit.

bb999

member

Activity: 70

Merit: 10

Quote from: statdude on June 10, 2013, 03:31:51 PM

Quote from: bb999 on June 09, 2013, 09:53:14 PM

Quote from: statdude on June 09, 2013, 05:00:07 PM

Quote from: Vycid on June 07, 2013, 06:47:38 PM

Quote from: TsuyokuNaritai on June 07, 2013, 06:46:50 PM

Interesting. Why do you think they're going to fall?

(Don't worry about dissuading PUT-sellers, the discussion would attract more! Grin

)

I've done some statistics with the rate of difficulty increase and the anticipated hashrate increase. They're overvalued.

(I DON'T think they're gonna fail, but I think the odds of being below 1.7BTC before September are worth up to a 0.1BTC premium.)

Such an option is worth about .25 BTC actually. I'd write you a few at that price at the lowest.

It's worth .25 BTC based on what? That may be a reasonable number but you need to provide some backing not just your opinion stated as if it's fact.

Based on black scholes... with 45 day implied volatility of the stock + estimate of .017ish average div.

Thank you for citing a source, we can debate the usefulness of Black-Scholes separately (implied vs realized volatility for instance) but I appreciate you offering some stat backing

statdude

legendary

Activity: 1498

Merit: 1000

Stock was trading at about 150% volatility before it got stuck at 2.5

hard to quantify now but technicall its now 100%

just using the same option pricing mechanisms as wall st.

murfshake

member

Activity: 84

Merit: 10

Does anyone have any reading material or sources about the OP's topic that would be relevant to investing in BTC?

statdude

legendary

Activity: 1498

Merit: 1000

Quote from: bb999 on June 09, 2013, 09:53:14 PM

Quote from: statdude on June 09, 2013, 05:00:07 PM

Quote from: Vycid on June 07, 2013, 06:47:38 PM

Quote from: TsuyokuNaritai on June 07, 2013, 06:46:50 PM

Interesting. Why do you think they're going to fall?

(Don't worry about dissuading PUT-sellers, the discussion would attract more! Grin

)

I've done some statistics with the rate of difficulty increase and the anticipated hashrate increase. They're overvalued.

(I DON'T think they're gonna fail, but I think the odds of being below 1.7BTC before September are worth up to a 0.1BTC premium.)

Such an option is worth about .25 BTC actually. I'd write you a few at that price at the lowest.

It's worth .25 BTC based on what? That may be a reasonable number but you need to provide some backing not just your opinion stated as if it's fact.

Based on black scholes... with 45 day implied volatility of the stock + estimate of .017ish average div.

bb999

member

Activity: 70

Merit: 10

Quote from: Vycid on June 07, 2013, 07:43:58 PM

Quote from: wo0x on June 07, 2013, 07:15:57 PM

1st of September is quite an interesting date, indeed. Basically, will AM proof sustainability or not...

What I think:

Your strike is reasonable, but the price too low to even start gambling

Maybe you find someone to PUT on date for 0.1 price, but not for immediate option.

Yeah, I was worried about that. Nobody wants their BTC tied up in options unless the premium is large...

I guess none of the exchanges will let you use your held ASICMiner shares as collateral against options? I'm imagining an arrangement where if ASICMiner starts trading near 1.7, then anyone using their shares to cover in the event of exercise will get a maintenance call.

I sense a business opportunity.

In the meantime, that offer stands. I can't beat 0.1BTC per option for the moment. Maybe later I'll consider a higher strike in exchange for a higher price...?

The economics of the trade are debatable. However .1BTC premium on 1.8BTC strike expiring Aug 30 (what is currently available on BTC-TC) is a 5.5% premium for 3 months (22% annualized without compounding) a solid nominal return.

Topic: Looking to buy PUT options on ASICMiner (Read 2638 times)