Topic: Options trading thread - page 2. (Read 5791 times)

The auction idea is a good one. It's a way to get people trading on the same asset in an otherwise sparse market where it is hard to find a buyer and seller on the same terms at the same time.

I'd suggesting offering a few different strike prices and expirations to keep it interesting, but not too many, again don't want to dispersed the market too much.

The smallest unit should be whatever you think is worth the trouble of administering it.

This was kind of fun, and very interesting.

Here's an idea I'm thinking about, any thoughts?

EDIT:
re-posted to its own thread here:
https://bitcointalksearch.org/topic/call-option-auction-discussion-577314
/EDIT

I would announce the offer of multiple 10 mBTC vanilla European call options all with the same specified strike price ($600, for example), and the same specified expiration date (2014-05-16, for example).

Lets say for example that I offer 1000 such options. (so options to purchase a total of 10 BTC in 0.01 BTC increments).

To determine who gets the options, and what price they pay for the options, I'd hold an auction.

Potential option buyers would indicate how many 10 mBTC options they want to buy, and what they are willing to pay per option.  So, a bid of "10 options @ 0.0003 BTC each" would indicate paying a total of 0.003 BTC purchase fee for a total of 0.1 BTC worth of options.

After the expiration of the auction, the highest bidder (price per option) would receive the options they wanted at the price they bid.  If any options remain, the second highest bidder would receive the options they wanted at the price they bid. This distribution of options would continue until there weren't enough options left to completely fill a bid. If there aren't enough options remaining for the lowest winning bidder, they would have the right to choose if they want to participate at their bid price for all the remaining options or if they don't want to participate at all (since their full bid wasn't filled completely).  If they choose not to participate, the process would continue with the next lowest bidder, until all options were purchased, or all bids were filled.

If multiple bidders bid the same price per option, then the bids would be filled in the order they are received.

The auction would end at some pre-announced deadline (48 hours after the auction announced, for example)

All bidders would have a specified amount of time (perhaps 24 hours?) from the close of the auction to send confirmed bitcoin transactions to the announced option address. If a purchase transaction does not receive 3 confirmations prior to the payment deadline, then their payment would be considered invalid and returned to them.  The options they bid on would remain unpurchased.

To simplify payout on the option expiration date, all bid would not be considered valid unless it includes a bitcoin address that the payout (if any) should be sent to.

I'm looking for some feedback before I decide if I actually want to put in the time and effort to run (and fund) this.

Some questions that I'm trying to make decisions about:

Is 10 mBTC per option a good choice?  Should it be 1 mBTC? 100 mBTC? 1 BTC?

How many "units" would there be interest for? (this would probably depend a bit on the size of each unit)

What would be a good strike price to attract bidders, while still reducing risk if an insufficient number of bidders participate.

What is a good amount of time to run the auction phase of the offer?  3 hours? 24 hours? 48 hours? 7 days?

What is a good expiration date for the options? May 16?  May 23?

Is this a good way to run this auction for multiple identical units, or is there some other form of auction that would work better?

Any other thoughts, questions, suggestions, or concerns?

Thanks, to both of you, for the tips.  They are definitely appreciated.

The tips you provide for these current transactions make it possible for me to continue to offer this escrow service to you and others in the future.

Sent

Escrow has been released and is fully confirmed. This transaction is now completed.

I thank you both for a successful and issue free transaction, and look forward to doing business with you again in the future.

Received.

Also left you both guys positive trust feedbacks.

It was a pleasure!!!!!

0.9851 BTC sent per request to 18888888PPJ8oGeqR6AKmoiKUme9da48Xf
Tip sent per request to escrow agreement tip address: 15rgGwpaAXzi5DgG3UkkFodKiRd1UMsor4
Transaction fee paid: 0.0001

https://blockchain.info/tx/d2d6c0134357dec7fd3b91eac287f8435ff7e8da06c8091f28d7f94e21384a98

On one single option? 5 BTC max

Not at the moment but the situation may arise. How large are you prepared to trade?

Smooth, if you want to do another call option, just suggest a duration and strike and I can tell you my price.

Regards

confirmed

Just double checking (in case circumstances have changed since it was posted), the address where you want to receive it is: 18888888PPJ8oGeqR6AKmoiKUme9da48Xf

Signed message below the separator.

I will be sending a small tip as well. Danny, you did a fantastic job on this one, I hope we can get more option trades going.

Signing and option funding address is 19xGRmoS3jqALhdyCbMsKFSbhGnAMPWAse

IDwhH9WsDCcsv678AnSW9yiS0t5bZjy8dhE1VnvqIwO3OpT6xHoG89Ehmw69eF1n2CrnrnM9blno4MH G0dtruqM=
--
I agree that the option has expired worthless. Please release the entire escrow for 201404050000 to the option writer. -smooth

Danny, if it expires. Keep 0.015 BTC and send the rest to my address.

Thx. I'll leave you positive feedback after I get it.

Yes, when it took off at 04:30 UTC yesterday, and again at 06:30 UTC today, I thought there just might be a change that this option was going to be exercised. Unfortunately it stalled out around 10:00 UTC today, so it's starting to look likely again that it will just expire.

You have to admit, the last 24 hours have been interesting.

Another 40% in the next 3 hours would be nice...Go BTC

The fee is from another period of BTC price, but that doesn't matter.

Basically, you can only submit orders by signing them with you PGP key. So aslong as your key is safe you can't be hacked. And if you are smart your key never leaves your offline PC. ALso there is/was no site that had similar volumes in derivatives trading like they did.

But personally I don't use them either. You need to be a whale for it to make sence.

What do they do right to make it solid platform with security and all? they charge 30 btc to even have an account! wtf! i wonder why would someone pay that kind of money really?

There was too little liquidity for the existing market makers to keep bids/asks up. So they stopped and mpex closed the section.

It is actually one of the most solid platforms, not with the design, but with the security and everything. The owner and his team are kinda big douches though. They are pretty happy if someone gets scammed. But they seem to be very honest.

mpex is such a shitty website. who trades there anyways? when you say there are no more market makers, is it because they left or is it because mpex does not support them anymore?