Topic: [Mpex.co] The Scientology of Bitcoin Finance? - page 15. (Read 27652 times)

Dividends for S.MPOE come from profits of MPEx. Those revenue comes primarily (two-thirds according to the october report) from
1) registration fees.
2) trade fees on MPEx.

So what are people primarily trading on MPEx? Well, S.MPOE shares. That's right, most of the profit of S.MPOE holders comes from getting new people to join and trade S.MPOE shares.

While unlikely to be intentional, this makes it more and more of a pyramid scheme.

It keeps you out.

Sorry for asking but that guy compares MPEx (whatever that is) with JP Morgan? Is he for real or just kidding?
I stopped reading after that so i can't really tell.

I don't feel as though the title is misleading and here's why:

Securities are traded but have little value and produce little returns. Of course besides s.mpoe which I an having a hard time understanding exactly where the dividends come from.

I have a feelinh that mr popescu is using the 30btc registration fees to pay dividends. If that is the case then it is most definitely a scam. If he is  earning his entire dividends using the options bot then it is not a scam but an elaborate gambling scheme.

I could be wrong and those 30btc may go to a legit cause that actually creates value in some way but I simply can't figure it out.

The rest of us here on planet Earth will take your latest playground antics as an admission that your claims regarding never hedging options positions while simultaneously never entering naked options positions are every bit as laughable as they appeared when you first made them -- while your allusion to MPBOR smacks of proof by reference to converging irrelevancies.

I think the thread title is misleading, in that I don't think Mpex is a scam. It seems to offer securities and people buy them - job done.

However the more relevent question is whether it is over-valued and that would seem to be the case. MPOE is trading at 0.00079937 per share with 1bn shares = 800k BTC (or a staggering 1bn USD roughly).

The income is massively volatile but appears as follows:

Oct 261 BTC
Sept 21 BTC
Aug 1779 BTC

So for the last 3 months the total was 2,061 BTC, which if annualised is 8,244 BTC

Thus for the last quarters data ONLY the stocks would seem to be trading at 97x earnings or a div yield of 1.0%. This seems incredibly low in Bitcoin world, compared to most stocks that yield 10-30%.

I await any corrections from MPOE-PR.

Part of what makes your idiocy so delicious is your amusing expectations to be instructed for free, forcibly, while kicking and screaming.

I'll make you kick and scream, sure, but I ain't instructing your bulbously barren head.

Was the request to back up your condescension with substance too hard for you? Remember, all you have to do is explain how one never enters naked options positions, while simultaneously never hedging options positions.

Or did you mean for hand-waving references to borrowing to somehow accomplish this magical feat all by itself?

You've never heard of MPBOR, have you.

Here, seems MP was amused enough with all this nonsense to write an article even. Revisiting the topic of “economic injustice”, with examples.

Interesting. Perhaps then you would enjoy deigning to explain to we mere mortals how one reconciles the following two statements:

1) I do not enter into naked (translation for current purposes: unhedged) options positions.

2) I do not hedge options positions.

Oh do tell, so that we may be enlightened.

Alternatively -- much as I suggested to you the last time you started throwing the weight of your own confusion around over in one of my threads where I had just rejected the possibility of listing on MPEx -- perhaps you'd like to run off and find a colleague or two who has acquired some investing experience elsewhere than while toddling around during Bitcoin's brief childhood, and first ask for an outside opinion on this ludicrous excuse for options market making.

The quasi-options available are generally priced by a bot which maintains a usurious spread and ludicrous levels of implied volatility frequently far above historical volatility -- making them a perfect way to extract cash from those who don't ignore the place entirely because they don't realise there are cheaper ways of doing this stuff. As for reliability, the operator claims in his site's FAQ that he "doesn't hedge...options positions".

However, a reliable market maker -- one which does not introduce inordinate levels of counterparty risk -- does not enter into naked positions. (No pun intended, despite MP's history of involvement in the Romanian porn industry: I mean naked options positions). Not entering naked positions means, for example, taking a long position in the underlying whenever one becomes net short in calls on that underlying. This type of hedge is part and parcel of any competent market making activity in derivatives. Failing to do so means failing to deliver under a non-trivial set of possible market outcomes. (It also means profiteering by continuing to run that risk of failing to deliver and not spending the resources to reduce that risk.)

As far as I can tell, judging by the shellacking which the bot sometimes takes, the claim about failing to hedge is correct. This suggests that with respect to options market making, the operation is not reliable from the standpoint of counterparty risk. To someone not paying attention to the counterparty risk which is necessarily introduced by a failure to hedge, the operation may appear to be perfectly safe and reliable...right up until it isn't. This is little different than the appearance that a 20-sided die will never come up showing '1', because it hasn't yet done so during your first 10 rolls.

Oh, and just as a reference point, the combined revenue for MPOE options contracts sold during August, September, and October was something around 2180 BTC.

The current open interest on ICBIT just in the March 2014 BTC/USD futures contract is 387,424, while volume is showing at a little under $13 million. I have no idea what the site's revenue on that volume might be. But it's interesting that during just the last 7 days, the top trader on ICBIT generated a profit of around 755 BTC, and during the last 30 days, the corresponding figure was 1877 BTC. In other words, the profit generated by just one trader during the last 30 days is approaching the entire MPOE options revenue across all contracts for a 3-month period.

ICBIT carries significant counterparty risk too, but at least it comes clean about it, as distinct from disingenuously promoting a failure to hedge as a positive point, rather than as an indication of what it really is.

EDIT: Clarified my wording about revenues and volumes.

Jimmothy, egalitarian predisposition is my one great weakness, but even i will concede that there are things too complex for a feller like yourself to ever understand.
And no amount of explainin' will make one bit of difference.
If i could only undo the slights dealt you by fate and poor breeding...  At this point... nothing can be done

Not sure what your point is. Looks like you just quoted a trillema post. So is it the "solid functionality" or "innovative gpg order system" that makes it worth 1 billion? I don't think your post clears up any confusion.

I must say that mpoe pr is probably the most active bitcoin pr person I have seen. But sadly I think this is because mpoe/mpex profits are directly tied to the amount of unfortunate noobs who pay 30btc to register and fail with options.

I honestly don't think mpoe has a problem dealing with questions lime mine as all he does all day is advertise his website/blog on other somewhat related threads.

A lot of financial related stuff creates the impression of being without any value for some.

The sad truth is that a lot of PR's statements have some valid point to some distinct.* That an exchange with four stocks, which are trading on lowish volume, all involving the creator (probably a good thing in this case) and some option trading, has such a high valuation seems to tell a lot of Bitcoin world. But this is probably just half of the truth: MPEx is rock solid, innovative (GPG order system!) and seemingly profitable for investors. MPEx' alleged irrelevance is also not the only reason why it survived three other exchanges and is probably here to stay for a long time.

http://trilema.com/category/mpex/ provides some further insight. Here is a good example, that it's more than a shitty website from the 90s.

*Especially sad, because many have a (sometimes eye-opening) "cold, hard reality" character.

Volume of Mpex's non-Mpex stocks in the last month: 110 BTC

I'm still laughing that he values his worth as 5 % of all bitcoins in existence.

This can't be real.

Wow. I'm sorry MPOE-PR, you must have quite the patience to deal with this all day.

Again I am impressed with the profits you seem to have made I just have no idea where this money comes from. What do you do to create value?

Lol, coming from a guy white knighting Havelock -- a company trying to pass off its ludicrous failed "IPO" as a "gift to [its] loyal supporters."