787700+ entries in 0.564s
herbijudlestoids: if BTCUSD stays at 750 for 2 weeks without budging and IV goes down
then
the value of
the puts goes down and whoever short
them profits
herbijudlestoids: if BTCUSD goes
to 1200 in 1s
then IV will go up and
the value of
the puts will increase commensurately...when puts are fare OTM (out of
the money)
then
their intrinsic value is mostly comprised of IV
herbijudlestoids: the
trade is a bet on IV being high and leveling off or going down, and
that
they wont get exercised (i.e.
the price wont go below 500)
dexX7: just
to be sure hehe
dexX7: soo.. if i understand correctly, when
the price goes up,
this guy wins, right?
herbijudlestoids: no i
think youre correct, but i dont know anything about it specifically
nubbins`: although i'm barely at
the level of understanding what i just said
nubbins`: afaik mpoe uses bond deposits
to back options
herbijudlestoids: if
there is no naked puts
then
they must have been written against something
dexX7: huh wasn't it
the other way around aka.
this guy sold puts?
herbijudlestoids: nubbins`: buying puts
tends
to be more of a call on IV
than anything else...term structure also plays a part in profit,
take a look at
the NYSE listed VXX ETF versus VIX for an example of what
term structure being in contango can do
to a rolling IV long
sypher_: herbijudlestoids,
thanks for
the explanation, I'm
trying
to get my head around it
herbijudlestoids: if
the price goes
to 500 but IV when puts were purchased was at 50% and goes down
to 20%
then
the puts might still be worthless
herbijudlestoids: maybe
they hold 1000BTC on bitstamp and want
to insure against
the price going below 500
nubbins`: purchaser is expecting btc
to fall below ~500 or whatever it was?
nubbins`: that orgy of puts
that was purchased
the other day
nubbins`: sorry for
the stupid question, but i'm exceptionally
thick with
this sort of
thing
herbijudlestoids: i dun know if MPEX supports naked short
the contracts, looks like
they only allow you
to do what
they call a SPLIT order, otherwise known as an options spread, so you short
the 722 puts and long some distant strike call, like 1000 calls.
herbijudlestoids: if it does,
then
they exercise and short BTCUSD at 722, leaving you long BTCUSD at 722
herbijudlestoids: if
the contract expires or
the price doesnt go below 722, you get
to keep
the "premium",
the cost of
the contract you sold
herbijudlestoids: so you sell someone
the contract which gives
them
the right
to short BTCUSD at 722.
they will never exercise
this contract unless
the price is <= 722
herbijudlestoids: option
to long is a call, option
to short is a put. if you sell a put, youre selling
the right for someone
to short at a given price
herbijudlestoids: options give you
the right but not
the obligation
to long/short
the underlying asset at a given strike price and date ...e.g
the option
to long BTCUSD at 1000 regardless of
the price as of Jan 2014
sypher_: you're way over my understanding grade. I'm at
the 'buy low; sell high' phase; which i could
translate in 'i'm an idiot'. :-)
herbijudlestoids: price goes
to 722 and you get exercised, if not collect premium
sypher_: nothing, just excited
to see
the
troll box on BTCe with all
the boys shouting ... i just wanna buy back in when its gonna stop fallin; exited at a loss some
time ago.
herbijudlestoids: sypher_: what kind of games are you playing
that youre losing sleep over
the movement
sypher_: uff, when's it gonna stop falling ... i wanna go
to sleep! ... >_>
sypher_: was reading about
the USPS but its just a few
talks atm, even
the article itself is cautious
nubbins`: canada post already sells numismatic coins from
the mint
nubbins`: hm, i'm obviously not up
to speed
nubbins`: don't you need caustic chemicals for
that?
nubbins`: sure, bit of a higher barrier
to entry.
herbijudlestoids: nubbins`: why not, for example, laser engraving direct
to steel?
herbijudlestoids: i guess i get what youre saying,
that having
the wallet files stored in multiple locations securely is probly as good as a cold storage device itself
punkman1: if your house burns down, you got fetch it from
the offsite backup
punkman1: it's pretty much
the same as backing up any other piece of data
sypher_: i also dig
the usb - bit coin enabled key on almost human
tv series :-)
punkman1: herbijudlestoids: I
think it's a solution looking for a problem
sypher_: but i do like
the idea of metal coins; if only, as 'ego' items ...
Duffer1: casc coins don't solve
that herb hehe
punkman1: why would you not have a backup of
that?
herbijudlestoids: punkman1: well lets say i put 1,000 BTC into a USB key and encrypt it securely etc and
then my house burns down
sypher_: herbijudlestoids, wouldn't it just be simpler
to print it yourself instead of a metal
trinket with an embedded key somewhere?
herbijudlestoids: i
think its interesting because its a necessary dimension for all who might want
to save bitcoins securely for a long duration
punkman1: why do you
think physical coins are interesting?
Duffer1: comply with your local money
transmitter laws and you're probably ok
herbijudlestoids: use your brain, interpret what im saying. dont let a
typo
trip you up
sypher_: ;) i meant on
the one
that you would concentrate ;)
herbijudlestoids: so i would just discard mtgox and icbit for analysis, concentrate on
the liquidity of
the spread for bitfinex and bitstamp
herbijudlestoids: on mtgox right now
the spread is $5, bitfinex $0 bitstamp $2, btc $1 and icbit $4
sypher_: ah, got you guys,
thanks for
the hand holding
herbijudlestoids: like i said, you can verify quantitatively by analysis of
the bdi/ask spread
nubbins`: implication is
that
there aren't good exchanges, just varying degrees of shitty
Duffer1: the point was
there aren't any
to name hehe
sypher_: seems like naming
them is out of
the etiquette here, sorry for
the question, didn't know
herbijudlestoids: check
the bid/ask spread
to see which has
the narrowest and most liquid spread
herbijudlestoids: the ones clearing
transactions successfully, at high volume and with no regulatory issues
sypher_: lol, why is
that nubbins` ?
herbijudlestoids: sypher_: my guess is its much simpler and
that
the price on
the shitty exchanges is going down
to match
the price on
the good exchanges
sypher_: glad i don't have
them
then :-) just bought in at 162 on btce, now I'm in almost panic selling mode. :D
nubbins`: fun fact, if you have btc or usd in mtgox, you're part of
the problem! :D
sypher_: then
the big sell order gets cancelled and put at a lower price, but not getting fulfilled... doing like
that since 165 earlier.
sypher_: btce, big sell orders
that aren't getting fulfilled, seems
to me
that many are panic selling under
those and
thats driving it down quite a bit
sypher_: was just here
to
try and understand
that pattern
there ;)
herbijudlestoids: err no, i meant opinions on
the withdrawal
transactoins...nevermind
herbijudlestoids: well
they can already buy it on bitstamp or other exchanges for significantly cheaper
than
the mtgox price
sypher_: I'm
thinking
that big ones are playing
to make it go down so
they can buy in cheaper, having it rebound later
sypher_: herbijudlestoids, i'm just a noob so i may have completely wrong
thoughts.
herbijudlestoids: that is why
the avg withdrawal
transaction amount is going down
herbijudlestoids: to me it looks like
they have been clearing
the smaller
transactions
sypher_: graph data is coming off
their servers afaik.