Topic: Miners, You Should Be Earning 7% Fixed Income With Options - page 2. (Read 10894 times)

The site may have discontinued service but the operator most definitely did not vanish.  You might still be able to submit a claim for funds.  PM me if you don't know how to contact them.

You need marketmakers, or else the orderbook liquidity will continue to look like sahara. Most people are victims of psychological manipulation that makes them completely mathematically incompetent to understand elementary school math (vanilla options are just that), unfortunately this includes miners. Their competence is excellent in addition and substraction but they cannot comprehend anything more complicated (such as multiplication, % or division, which is all thats required to understand options really).

Secondly, your site needs security, i myself lost over 100 bitcoins (when they were still trading at above 8$) to bitoption.org because their site vanished together with its owner.

In short, i love options, but im not going to trade any single option unless the exchange seems to be able to offer these 2 things: liquidity, and existence 12 months from now.

At this time, given the past failures (bitoption, bitcoinca etc) you're propably much better off trying to team up with someone such as mtgox.

Do it ™

Think of the MoneyPak exchange as a separate service, because that's really what it is. I actually had the idea before BitcoinOPX, so this is sort of combining the sites. However, the added traffic should also help with BitcoinOPX trading.

But as for deposit options we don't plan to accept MoneyPak at this time.

I'm missing something then.  Is this to enable the ability to deposit funds to BitcoinOPX for trading?    If so, then you carry a history of where those MoneyPak's are spent.  MoneyPaks are exclusively purchased only in the U.S.  BitcoinOPX, um .... , probably shouldn't be accepting funds from the U.S.

With Bitcoins from the blockchain, neither you nor anyone else except the sender really knows which country the funds came from.  With MoneyPaks, you know the exact country the funds came from.

Am I missing something obvious?

We wouldn't accept any USD. All we do is take in the BTC from the Seller and the MoneyPak code from the Buyer and facilitate the trade. The same thing happens already in the forum's currency exchange section, but without the efficiency of a middleman between the parties.

Are you sure you want to accept traceable USDs for a service like this?

Hi everyone,

We're working to add currency exchange with a focus on MoneyPaks because these are handy for getting money into and out of bitcoins. MoneyPaks can of course be used to reload prepaid credit cards used for cash at ATMs.



We want to match sellers of BTC (miners) with buyers of BTC who may be new to Bitcoin or otherwise not want to wait for their money to reach an exchange.

Say a miner wants to sell 50 BTC. They would look up the current exchange rate (say $6.00) and list a MP request for $300 in our currency exchange section. Someone looking to buy BTC would just go to a local 7-eleven, CVS etc. and load that amount to a MP.

They would return to our site to accept the offer and submit the MP code.

There are two ways to handle things from here:

Way 1. We need to manually check (or bypass moneypak.com's captcha) that the code is valid and not yet used. We'd then alert the seller the code was valid and we were soon transferring their BTC to the buyer, so they should use the code immediately.

-or-

Way 2. We get the seller's re-loadable prepaid card number upfront, and load the MP code onto it ourselves to verify everything works out ok before transferring the BTC to the buyer.

Either way we act as middleman to facilitate the exchange for hopefully a negligible fee. Moneypaks themselves cost just $5. If we can set things up efficiently this could be one of the fastest and cheapest ways to go from USD to BTC.

Yes, BitInstant is a stellar service which can be used by new people to get money into bitcoin, but this would be even cheaper (and faster?) especially for larger amounts (MP loads up to $500 or $1K at Walmart).

I think way 2 is best, but what do you think? Also, would this be a desired service?

LOL

Thanks @markm, you're probably right. I think a good indicator of a scam site is not having resistance to anything. Business logic for the longer term means basing decisions on a bigger picture, not short term aims. We certainly do have a larger picture in mind. Stay tuned...

Wow, a lot to wade though.

First impression: If the point is to run away with everyone's money, why bother having security that might actually make it harder for stupid people to hand over their money? Better to make it user-friendly, the moeny is gone anyway, whether some third party hacker gets it first or not.

-MarkM-

You're right, I replied hastily and made a mistake. The $5 is not multiplied by anything, it's flat. So the escrow due would be $5.00.

What's going on here is far out-of-the-money options are not well backed, due to the difficulties of counterparty risk. So in summary, people should not look to make a killing on them as the system isn't set up for that. Traditionally most traded options are in-the-money or close to in-the-money. You do get trading in the cents range on far out-of-the-money positions, but these usually do expire worthless. We will probably add a high risk of default warning message on such orders.

Well, now the example in that page is incorrect, as the $3.00 is below the $5 minimum.

No you have it right.

The price wouldn't be expected to move above $9.25 as that would be more than a 50% move. However, there is a $5.00 minimum (there was a How it Works page omission - updated), so that would be $5.00 x 100 coins = $500 required for escrow. Also, once 80% of those funds are in use a margin call is issued which must be met within 24 hours or the option is closed and settled in favor of the holder.

Edit: I replied hastily and made a mistake, the $5 is flat, please see below.

I'm missing something I think.  The higher the strikeprice, the less Bob needs to put up for escrow.

Using your example of Bob creating a CALL 100 option on bitcoins, but let's say the strike price is $9.50 expiring in 4 weeks. Current price is $6.50.

Escrow = ($6.50 x 50%) = $3.25 + $6.50 = $9.25 - $9.50 = -$0.25

Taken literally, Bob can write that call option without having to put up any funds for escrow.

I'm not sure what you mean by "moved by a small order". When an order is placed if it's the best for the instrument then it is the best shown. Options often represent some larger multiple of the underlying asset, such as 100 company shares in terms of stock options, so even 1 option contract is generally significant. I've sat in front of the screen live trading Google options (a $500 security) and watched stingy traders have a bid/ask war for the equivalent of $5.

However, even if that were the case there is no reason (that I can see) to withhold bid/ask data. I happen to agree with @Goomboo about the information being useful for data analysis purposes.

The market price for retail options, especially longer term ones, is very much affected by perception. Being able to see all bids and asks could be quite useful. As I said I had wished for that information myself.

If the bid/ask can be moved by a small order, you'd want to have an order book (regardless of what the type of security is). Many retail trading platforms do not show depth of market for options because the counterparty is usually a market maker who is able to absorb fairly large orders without significantly moving the bid/ask.

Hey everyone, I'm happy to announce exciting new changes!  

Summary:

- We've expanded options to now include Gold, Silver, Brent Crude futures, shares of Google, Apple, Facebook, and more!
- Option lot size 1 added (all sizes: 1, 10, 100, 1000)
- Trade fee reduced to just $0.25 per contract
- Simplified escrow is now covering a 50% price move for bitcoins, and 5% move for all other assets

The biggest change is our expanded trading to options on the assets above. Additionally, we've added a lot size of just 1 and lowered the trade fee to $0.25 so it's now possible to trade "for fun" too

Please see our updated How it Works page for details.

More features are planned including currency exchange, and a user requested order book view for every option, every strike price. Something else you'd like to see? Please let me know of comments or suggestions you have.

Thanks, and happy trading!

Yes, I think that's the best solution.  

Additionally, I'm thinking to limit contract terms to 2 months at a time. That will help with both volume and volatility range.


Yes, he wants an orderbook for every option, every strike price. Orderbooks are common on BTC currency exchanges, for example, but not in the real world for options. However, I remember wishing for that information myself when trading options, so I'm in favor or the idea. We will probably add it.

I guess you're talking about an order book view, like this: https://bitcointalksearch.org/topic/icbit-derivatives-market-usdbtc-futures-trading-live-50817 (see screenshot in the first post)?

I do agree you have to find a balance somewhere between 0% and 100%, so 50% should be a good option... I would suggest you then place a request for further collateral when 75% - 80% of the current collateral is in use because of a price rise (calls) or price fall (puts). That would give you ample time to close the position should someone renege on their obligations, with the least damage to the counterparty

Looking forward to see this get up and running !