Overpriced options | Bitcointalksearch.org

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: arbitrage001 on October 24, 2014, 03:45:46 AM

Quote from: wangxinxi on October 24, 2014, 03:36:54 AM

Quote from: arbitrage001 on October 24, 2014, 03:25:13 AM

How much collateral the option sellers have on your exchange?

If I am to buy out all the under price option, what guarantee do I have they have enough btc on your exchange to settle trade (in the unlikely event that bitcoin go up to 600 over night)?

These are cash or nothing binary options. The sellers need have enough margin to cover the maximum possible loss (i.e. 0.01 BTC for each option). So nobody can default.

I see.

Payout is 0.01 btc regardless of price once reach on settlement date only. Then being a seller is better once the price of the option reach 0.07 or higher as the loss is only 0.03 at most.

What is the fee the exchange charge?

I just added the option price calculator to the trading interface. So now you don't need to write your own program or build a spreadsheet to price the options. I hope this can help you hunt mispriced options more easily. You can check here for the update https://bitcointalksearch.org/topic/ann-coinutcom-the-only-bitcoin-options-exchange-beta-821889

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: arbitrage001 on October 24, 2014, 03:45:46 AM

Quote from: wangxinxi on October 24, 2014, 03:36:54 AM

Quote from: arbitrage001 on October 24, 2014, 03:25:13 AM

How much collateral the option sellers have on your exchange?

If I am to buy out all the under price option, what guarantee do I have they have enough btc on your exchange to settle trade (in the unlikely event that bitcoin go up to 600 over night)?

These are cash or nothing binary options. The sellers need have enough margin to cover the maximum possible loss (i.e. 0.01 BTC for each option). So nobody can default.

I see.

Payout is 0.01 btc regardless of price once reach on settlement date only. Then being a seller is better once the price of the option reach 0.07 or higher as the loss is only 0.03 at most.

What is the fee the exchange charge?

The fee is 0.00004 BTC for each option.

arbitrage001

legendary

Activity: 1067

Merit: 1000

Quote from: wangxinxi on October 24, 2014, 03:36:54 AM

Quote from: arbitrage001 on October 24, 2014, 03:25:13 AM

How much collateral the option sellers have on your exchange?

If I am to buy out all the under price option, what guarantee do I have they have enough btc on your exchange to settle trade (in the unlikely event that bitcoin go up to 600 over night)?

These are cash or nothing binary options. The sellers need have enough margin to cover the maximum possible loss (i.e. 0.01 BTC for each option). So nobody can default.

I see.

Payout is 0.01 btc regardless of price once reach on settlement date only. Then being a seller is better once the price of the option reach 0.07 or higher as the loss is only 0.03 at most.

What is the fee the exchange charge?

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: arbitrage001 on October 24, 2014, 03:25:13 AM

How much collateral the option sellers have on your exchange?

If I am to buy out all the under price option, what guarantee do I have they have enough btc on your exchange to settle trade (in the unlikely event that bitcoin go up to 600 over night)?

These are cash or nothing binary options. The sellers need have enough margin to cover the maximum possible loss (i.e. 0.01 BTC for each option). So nobody can default.

arbitrage001

legendary

Activity: 1067

Merit: 1000

How much collateral the option sellers have on your exchange?

If I am to buy out all the under price option, what guarantee do I have they have enough btc on your exchange to settle trade (in the unlikely event that bitcoin go up to 600 over night)?

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Thank you for checking the information. Yeah, we just started the exchange. It takes time to get trust from people. You can know more information from my linkedin profile, academic homepage, facebook, blog etc. I don't mind your checking of them. The more transparent we make the exchange, the better you will trust us.

arbitrage001

legendary

Activity: 1067

Merit: 1000

Quote from: wangxinxi on October 24, 2014, 03:02:39 AM

Quote from: arbitrage001 on October 24, 2014, 02:52:07 AM

Quote from: wangxinxi on October 24, 2014, 02:42:34 AM

Quote from: arbitrage001 on October 24, 2014, 02:35:34 AM

Some of the in the money calls are in the money and sell for less than their intrinsic value?

Yeah, you first estimate the volatility and then use a cash or nothing option pricing tool to check the price, and then you could see some of the options are being bought at a higher price than what it should be. If you cannot find a tool, you can make a spreadsheet to calculate using the formulas in http://en.wikipedia.org/wiki/Binary_option#Cash-or-nothing_call

Right now, because the site is newly started, you could find many chances easily. Later if the market matures, it will be harder.

How will it settle then?

The strike price for in the money already get hit. 350 call strike price can be bought for 0.00671 btc. What is the payout for it?

They are european style options and thus they will be exercised only at the expiration date. The payout is 0.01 BTC.

People doing arbitrage will probably buy all the in the money the option and short the same amount of bitcoin right away on trusted exchange.

The problem is your option exchange don't have any trust right now.

At least your name appear to be legit:
https://who.godaddy.com/whoisstd.aspx?domain=coinut.com&prog_id=GoDaddy&k=h4VefIWPn09en4ioBJ9OBvLn8FNzGUbkhoOR4tEQ52%2fQQsk4wCSNa5Io9h8oIJz5
https://www.google.com/maps/place/27+Pasir+Panjang+Rd,+Singapore+117537/@1.270575,103.798593,17z/data=!3m1!4b1!4m2!3m1!1s0x31da1beaaa8ee35d:0x53cff9f80efdb6af

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: arbitrage001 on October 24, 2014, 02:52:07 AM

Quote from: wangxinxi on October 24, 2014, 02:42:34 AM

Quote from: arbitrage001 on October 24, 2014, 02:35:34 AM

Some of the in the money calls are in the money and sell for less than their intrinsic value?

Yeah, you first estimate the volatility and then use a cash or nothing option pricing tool to check the price, and then you could see some of the options are being bought at a higher price than what it should be. If you cannot find a tool, you can make a spreadsheet to calculate using the formulas in http://en.wikipedia.org/wiki/Binary_option#Cash-or-nothing_call

Right now, because the site is newly started, you could find many chances easily. Later if the market matures, it will be harder.

How will it settle then?

The strike price for in the money already get hit. 350 call strike price can be bought for 0.00671 btc. What is the payout for it?

They are european style options and thus they will be exercised only at the expiration date. The payout is 0.01 BTC.

arbitrage001

legendary

Activity: 1067

Merit: 1000

Quote from: wangxinxi on October 24, 2014, 02:42:34 AM

Quote from: arbitrage001 on October 24, 2014, 02:35:34 AM

Some of the in the money calls are in the money and sell for less than their intrinsic value?

Yeah, you first estimate the volatility and then use a cash or nothing option pricing tool to check the price, and then you could see some of the options are being bought at a higher price than what it should be. If you cannot find a tool, you can make a spreadsheet to calculate using the formulas in http://en.wikipedia.org/wiki/Binary_option#Cash-or-nothing_call

Right now, because the site is newly started, you could find many chances easily. Later if the market matures, it will be harder.

How will it settle then?

The strike price for in the money already get hit. 350 call strike price can be bought for 0.00671 btc. What is the payout for it?

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: arbitrage001 on October 24, 2014, 02:35:34 AM

Some of the in the money calls are in the money and sell for less than their intrinsic value?

Yeah, you first estimate the volatility and then use a cash or nothing option pricing tool to check the price, and then you could see some of the options are being bought at a higher price than what it should be. If you cannot find a tool, you can make a spreadsheet to calculate using the formulas in http://en.wikipedia.org/wiki/Binary_option#Cash-or-nothing_call

Right now, because the site is newly started, you could find many chances easily. Later if the market matures, it will be harder.

arbitrage001

legendary

Activity: 1067

Merit: 1000

Some of the in the money calls are sell for less than their intrinsic value?

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Quote from: arbitrage001 on October 24, 2014, 02:30:03 AM

Quote from: wangxinxi on October 23, 2014, 12:49:12 PM

Based on my calculation, there seems a few overpriced buy limit orders on https://coinut.com

Why don't you fill the order then if you think it is overpriced?

I build the exchange, and I don't trade by myself for fairness.

arbitrage001

legendary

Activity: 1067

Merit: 1000

Quote from: wangxinxi on October 23, 2014, 12:49:12 PM

Based on my calculation, there seems a few overpriced buy limit orders on https://coinut.com

Why don't you fill the order then if you think it is overpriced?

wangxinxi

hero member

Activity: 826

Merit: 1000

Founder & CEO of Coinut.com, Litecoin Core Dev

Based on my calculation, there seems a few overpriced buy limit orders on https://coinut.com

Topic: Overpriced options (Read 1173 times)