LOL! please think of a fix that will make everyone money.
Well, the best way for you to make money right now is to take advantage of the imminent long squeeze.
Price at the time: ~4.2
Topic: "No Reserve" explanation - page 2. (Read 9025 times)
Well, the best way for you to make money right now is to take advantage of the imminent long squeeze.
Price at the time: ~4.2
By the way, in my opinion what he did should be called market manipulation and is criminal.
hey Zhou, how's that recommendation to sell working out for your clients?
I wonder who actually listened to him.
hey Zhou, how's that recommendation to sell working out for your clients?
Happy New Year!
hey Zhou, how's that recommendation to sell working out for your clients?
"No reserve" again 
We are talking about running out of USD reserves.
that means you're broke.
if i were to have designed Bitcoinica from the beginning, i probably would have only allowed funding in USD's upon which you could then buy, sell, or short bitcoin just like regular brokerages do with their paper assets.
by allowing btc to leverage up more btc, its almost like building a derivatives tower on paper. the volatility kills you and the demand for USD is just too great.
by allowing btc to leverage up more btc, its almost like building a derivatives tower on paper. the volatility kills you and the demand for USD is just too great.
Any broker allows you to short EUR/USD with USD.
EDIT: Remember, everything is relative, including volatility. If BTC/USD is volatile, both BTC and USD are volatile. Longing BTC with BTC (or shorting USD with BTC) and shorting BTC with USD (or longing USD with USD) are essentially the same in terms of financial risk and volatility.
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by allowing btc to leverage up more btc, its almost like building a derivatives tower on paper.
I can't believe that you have any financial experience. This is exactly how leverage works. In security trading, you use purchased securities as collateral to borrow more capital to purchase more.
Or maybe you're saying that Bitcoin is paper.
Anyway, we have been running for more than 3 months, and actual risk is minimal. The out-of-reserve redflag has been implemented long ago, and today is the first time that it's triggered in a large scale. Even 9/11 was completely fine for Bitcoinica.
as much as some of us wish Bitcoin to be money, at this point, it is still a speculative asset. so allowing investors to use Bitcoin as collateral to leverage up 10:1 is irresponsible given the volatility and reeks of what the primary dealers did at the peak of 2007.
at the time, they were using bonds of all sorts, junk, subprime, FNM bonds, mortgage bonds, UST's, as "money" to provide collateral for their overnite trades. how'd that turn out?
As I understand it, you will not use the BTC belonging to long positions to allow shorts to cover themselves but you will allow the USD belonging to the short positions to allow longs to cover themselves. If this is incorrect, please explain where I went wrong. If it is correct, it is an unresolved issue.
Longs will need BTC reserves to cover themselves because they are essentially selling to cover.
Ok, so if I have a long position, and most others go short, I can get stuck in my position like the shorts got stuck today. At least you offer an equal opportunity screw job.
And here I was with the impression he had full reserves, but if that were the case we would see either deposit limits (you can only deposit x if we have 2.5x spare reserves) or changing margins.
ohhhhhhhhhhhhhhhhhhhhhhhh shit 
edit: Do you have a plan for what happens if the market keeps going up like I think it will?
edit: Do you have a plan for what happens if the market keeps going up like I think it will?
There are limit orders from the positions of long people. So there will be more selling soon.
Also, forced liquidations will still happen (but never at insane prices), but we will eat all the risk. :-(
Oh dear.... :O
SELLL!
Sorry to disappoint you. *removes sell stop order*
just joking, I'm all long on bitcoinica.
Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance. 
All your unrealized profits are automatically leveraged again for trading.
Your tradable balance should already include the profits.
Maybe he wants to withdraw some of the profit to his wallet outside Bitcoinica.
Sorry for my misunderstanding.
If you have profits to support your position, technically you can already use the Exchange or withdraw feature to do whatever you want, just like the real USD balance. However, the limit is your actual USD balance, as it can't be negative.
Unfortunately but we don't offer the service to let you withdraw more USD than what you have.
Ok, so I have to liquidate my position completely in order to make use of my profit. Another small suggestion, could you make the exchange system deduce USD$ from positive profit balance?
Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance.
All your unrealized profits are automatically leveraged again for trading.
Your tradable balance should already include the profits.
Maybe he wants to withdraw some of the profit to his wallet outside Bitcoinica.
Sorry for my misunderstanding.
If you have profits to support your position, technically you can already use the Exchange or withdraw feature to do whatever you want, just like the real USD balance. However, the limit is your actual USD balance, as it can't be negative.
Unfortunately but we don't offer the service to let you withdraw more USD than what you have.
Interesting~~
Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance.
All your unrealized profits are automatically leveraged again for trading.
Your tradable balance should already include the profits.
Maybe he wants to withdraw some of the profit to his wallet outside Bitcoinica.
Yes, if we can move partial P/L$ balance to USD$ balance then we can do whatever we want to it like converting to BTC or withdraw it
Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance.
All your unrealized profits are automatically leveraged again for trading.
Your tradable balance should already include the profits.
Maybe he wants to withdraw some of the profit to his wallet outside Bitcoinica.
Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance.
All your unrealized profits are automatically leveraged again for trading.
Your tradable balance should already include the profits.
I'm pretty sure that real world brokerages have access to really quick short term loans.
Yup. Real brokerages have capital which is loaned to customers, so they can buy on margin. If that starts running out because the customers are net long, they'll raise more by increasing the margin requirements.
That's what COMEX did at least twice over the past year (2011), probably because traders' net positions on silver and gold were too long for them.
Each time COMEX raised margins it triggered corrections in gold and silver (some quite severe), but that's because COMEX was the market. I wouldn't expect this Bitcoinica issue to trigger a correction in bitcoin, because bitcoinica isn't the market (MtGox is).
what was the magic solution, BTW?
More people opened short positions because Zhou alerted that so many folks were long, and they wanted to be contrarians.
Also, some folks who were long on bitcoinica probably closed their positions because of the hiccup. Even if they withdrew their funds, less people long at 1:5 margin, is more margin available.
Hi Zhoutong, could you let us partially cash out profit from our position? Currently, we have to liquidate our position to make the profit move into USD balance, I would like to buy real BTCs using my profit balance.
As I understand it, you will not use the BTC belonging to long positions to allow shorts to cover themselves but you will allow the USD belonging to the short positions to allow longs to cover themselves. If this is incorrect, please explain where I went wrong. If it is correct, it is an unresolved issue.
Longs will need BTC reserves to cover themselves because they are essentially selling to cover.
Ok, so if I have a long position, and most others go short, I can get stuck in my position like the shorts got stuck today. At least you offer an equal opportunity screw job.
As I understand it, you will not use the BTC belonging to long positions to allow shorts to cover themselves but you will allow the USD belonging to the short positions to allow longs to cover themselves. If this is incorrect, please explain where I went wrong. If it is correct, it is an unresolved issue.
Longs will need BTC reserves to cover themselves because they are essentially selling to cover.
Ok, so if I have a long position, and most others go short, I can get stuck in my position like the shorts got stuck today. At least you offer an equal opportunity screw job.
Yes, the opportunity of screwing up is programmed to be equal.
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