1) what exchange are you basing the strike price on?
2) what determines the settlement price, for such thinly traded market, you cant base on the closing price on a specific time at expiration date. It needs to be the average price for the last 24-48 hours taken at hourly interval to avoid price manipulation
3) i cant comment on the premium you are charging because i have no idea what the current price is compared to the strike you are posting, if the strike is atm or otm.
All in all, this is interesting.
Topic: [WTB] 10BTC AMC European Call Options - page 2. (Read 2736 times)
I think there has been a misunderstanding if people are afraid of selling this because they believe Ken may temporarily manipulate the asset price and put me in the money. As long as enough collateral is posted they won't be forced to buy shares of AMC to ensure they meet their obligation to me. The only time I can execute this option is at the expiration date. I can not execute it at any time before that. This is why it is a European call option instead of the more commonly used American call option used on BTCT and BF. The European style was chosen to reassure sellers that they would not be negatively impacted by a temporary spike in price provided they simply had enough collateral of which they can send more to the escrow at any time.
edits: bolded for emphasis
edits: bolded for emphasis
... I wouldn't advise anyone to take this deal as Ken has a history of manipulating his stock price. He was caught by Ukyo and had his hand slapped for it, but that only means he will be more careful next time.
+1
Basically, your escrow request is far too high.
I don't follow you.
By your own figures:
100% of option proceeds = BTC10
20% of underlying security value less out-of-the-money amount = 20k * BTC0.0025 * 20% = BTC10
Giving total "escrow" requirement of BTC20.
However, the option proceeds are included in the above.
Surprise is asking for BTC25, but you get to keep the BTC10 option proceeds, so really he's only asking BTC15.
So please, I'm obviously missing something, please explain.
20% of the underlying, less any out of the money value. The option is out of the money by more than 20% so there is no underlying value to post.
Your understanding of what"20% of the underlying less the out of the money" obviously differs greatly from mine. To me it means that for options out of the money it's 20% of market. I cannot believe that you honestly believe that for options out of the market it means ":free".
So please share what you think the escrow would be for options under This pricing model would be with your understanding.
Basically, your escrow request is far too high.
I don't follow you.
By your own figures:
100% of option proceeds = BTC10
20% of underlying security value less out-of-the-money amount = 20k * BTC0.0025 * 20% = BTC10
Giving total "escrow" requirement of BTC20.
However, the option proceeds are included in the above.
Surprise is asking for BTC25, but you get to keep the BTC10 option proceeds, so really he's only asking BTC15.
So please, I'm obviously missing something, please explain.
20% of the underlying, less any out of the money value. The option is out of the money by more than 20% so there is no underlying value to post.
Basically, your escrow request is far too high.
I don't follow you.
By your own figures:
100% of option proceeds = BTC10
20% of underlying security value less out-of-the-money amount = 20k * BTC0.0025 * 20% = BTC10
Giving total "escrow" requirement of BTC20.
However, the option proceeds are included in the above.
Surprise is asking for BTC25, but you get to keep the BTC10 option proceeds, so really he's only asking BTC15.
So please, I'm obviously missing something, please explain.
As per agreement in PM:
-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
The escrow address for Surprise's Options transaction would be:
1HQdTr4ipekzhtrFhzoa5eoF1m1UPUpZ1n
Please state and agree to the conditions (if item is received damaged, item lost with tracking, customs fee etc) beforehand.
If possible, GPG sign your agreement to prevent any discrepancies later on and please ship with tracking to prevent problems during delivery. GPG signing is not a requirement, and any verbal exchange in the form of private messages or posts on bitcointalk.org, or email is effective as a statement of condition.
The fine print:
This Contract is solely generated for the purpose of facilitating the transaction between the seller and the buyer, which refers to the pseudonyms used on bitcointalk.org.
The escrow holder, John, assumes and gives no liability or guarantees on the satisfaction of all parties involved, although he agrees to mediate and facilitate the deal to the fullest extent he is capable of. On the event that any problems arises, he will release the escrow to whichever party that presents him with the most convincing proof and/or after an open discussion with others or theymos.
The verbal acceptance by both parties (or the failure to reject) and the sending of Bitcoins to the escrow address above constitutes the acceptance of the terms and conditions stated, and the activation of this Contract.
Please understand that I am assuming the risk of holding the escrowed Bitcoins, and I am using my own time to facilitate this transaction.
As per agreement, I am imposing a fixed and nonrefundable fee of 0.5BTC for this transaction, pre-paid to 1NB1KFnFqnP3WSDZQrWV3pfmph5fWRyadz before the start of the escrow.
If I am offline when the BTC is received (please check on blockchain.info), please consider the escrow active (and go ahead with shipping etc) when the transaction gets 3 confirmations or more as the escrow address is unique for this transaction.
Thank you.
John (the escrow holder)
28 June 2013
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-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
The escrow address for Surprise's Options transaction would be:
1HQdTr4ipekzhtrFhzoa5eoF1m1UPUpZ1n
Please state and agree to the conditions (if item is received damaged, item lost with tracking, customs fee etc) beforehand.
If possible, GPG sign your agreement to prevent any discrepancies later on and please ship with tracking to prevent problems during delivery. GPG signing is not a requirement, and any verbal exchange in the form of private messages or posts on bitcointalk.org, or email is effective as a statement of condition.
The fine print:
This Contract is solely generated for the purpose of facilitating the transaction between the seller and the buyer, which refers to the pseudonyms used on bitcointalk.org.
The escrow holder, John, assumes and gives no liability or guarantees on the satisfaction of all parties involved, although he agrees to mediate and facilitate the deal to the fullest extent he is capable of. On the event that any problems arises, he will release the escrow to whichever party that presents him with the most convincing proof and/or after an open discussion with others or theymos.
The verbal acceptance by both parties (or the failure to reject) and the sending of Bitcoins to the escrow address above constitutes the acceptance of the terms and conditions stated, and the activation of this Contract.
Please understand that I am assuming the risk of holding the escrowed Bitcoins, and I am using my own time to facilitate this transaction.
As per agreement, I am imposing a fixed and nonrefundable fee of 0.5BTC for this transaction, pre-paid to 1NB1KFnFqnP3WSDZQrWV3pfmph5fWRyadz before the start of the escrow.
If I am offline when the BTC is received (please check on blockchain.info), please consider the escrow active (and go ahead with shipping etc) when the transaction gets 3 confirmations or more as the escrow address is unique for this transaction.
Thank you.
John (the escrow holder)
28 June 2013
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From the CBOE margin rules:
Basically, your escrow request is far too high.
Beyond that, I wouldn't advise anyone to take this deal as Ken has a history of manipulating his stock price. He was caught by Ukyo and had his hand slapped for it, but that only means he will be more careful next time.
Quote
Short Call
Initial margin requirement:
100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any
minimum requirement is option proceeds plus 10% of the underlying security value
proceeds received from sale of call(s) may be applied to the initial margin requirement
after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
Initial margin requirement:
100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any
minimum requirement is option proceeds plus 10% of the underlying security value
proceeds received from sale of call(s) may be applied to the initial margin requirement
after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
Basically, your escrow request is far too high.
Beyond that, I wouldn't advise anyone to take this deal as Ken has a history of manipulating his stock price. He was caught by Ukyo and had his hand slapped for it, but that only means he will be more careful next time.
We're not trading on the CBOE here. I'm taking extra measures to ensure whoever sells this to me can meet agreed upon obligations. I think profit margins are still strong for sellers if their perspective is correct, especially if they are long ASICMINER and post those shares as collateral. I also think it would be an undue burden on the escrow to have to constantly monitor, accept/withdraw collateral.
Out of curiosity, is there a particular reason you don't want to use the options functionality already built into BTCT and Bitfunder, the two markets where AMC is already traded?
BTCT and BF require call options to be covered before being written. Put another way, someone needs to own BTCT or BF shares before they can sell call options on them. Traders with a negative outlook on AMC are unlikely to hold any AMC shares or want to hold any. They have no way to profit off an expected collapse of AMC's share prices. I'm giving them an opportunity they didn't have before and in return getting call options on terms I desire.
Out of curiosity, is there a particular reason you don't want to use the options functionality already built into BTCT and Bitfunder, the two markets where AMC is already traded?
Overview
Recently I have noticed many involved in the BTC securities markets believe AMC is going to drop dramatically in price or even fail. At the moment there are few if any ways for these market participants to realize gains off their perspective on the situation. I have a positive long term outlook on AMC. I'm willing to buy call options from someone who does not have any AMC shares to sell at the moment, which I suspect is the majority of traders wishing to realize gains off AMC's potential downfall.
The seller of these call options to me will need to post collateral to ensure sufficient funds are available in the event I wish to exercise my right to buy at the end of the option timeline. An escrow will be used to hold the seller's collateral and to pay the seller my BTC once the collateral has been posted. In the event I do not exercise my right to buy at the end of the option timeline the seller will have the collateral returned by the escrow. BTC and/or ASICMINER Shares are acceptable collateral. Any dividends collected on shares will be returned to seller.
Details
Special Conditions
In the event the cost of purchasing the AMC shares at the current market price exceeds the value of the collateral the escrow will use the collateral to purchase AMC shares so as to ensure the seller does not default on obligations. The seller may post more collateral to avoid triggering this event at any time.
Closing
The contract goes to the bidder who agrees to post the most collateral above 25 BTC. Failure to post collateral to the escrow within 4 hours of auction close will result in the contract going to the next highest bidder. Once collateral has been received the escrow will send the 10BTC. I think this is a good opportunity for someone with a negative outlook on AMC to make a nice profit in the event their perspective is accurate.
Recently I have noticed many involved in the BTC securities markets believe AMC is going to drop dramatically in price or even fail. At the moment there are few if any ways for these market participants to realize gains off their perspective on the situation. I have a positive long term outlook on AMC. I'm willing to buy call options from someone who does not have any AMC shares to sell at the moment, which I suspect is the majority of traders wishing to realize gains off AMC's potential downfall.
The seller of these call options to me will need to post collateral to ensure sufficient funds are available in the event I wish to exercise my right to buy at the end of the option timeline. An escrow will be used to hold the seller's collateral and to pay the seller my BTC once the collateral has been posted. In the event I do not exercise my right to buy at the end of the option timeline the seller will have the collateral returned by the escrow. BTC and/or ASICMINER Shares are acceptable collateral. Any dividends collected on shares will be returned to seller.
Details
- Strike Price: 0.004
- Cost Per Share: 0.0005
- Number of Shares: 20000
- Expiration Date: September 28th 2013 11:59PM GMT
- Escrow: John K or other reputable
- Minimum Collateral: 25 BTC or Highest Bidder
- Auction End: June 28 2013 9:00PM GMT
Special Conditions
In the event the cost of purchasing the AMC shares at the current market price exceeds the value of the collateral the escrow will use the collateral to purchase AMC shares so as to ensure the seller does not default on obligations. The seller may post more collateral to avoid triggering this event at any time.
Closing
The contract goes to the bidder who agrees to post the most collateral above 25 BTC. Failure to post collateral to the escrow within 4 hours of auction close will result in the contract going to the next highest bidder. Once collateral has been received the escrow will send the 10BTC. I think this is a good opportunity for someone with a negative outlook on AMC to make a nice profit in the event their perspective is accurate.
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