Author Topic: What is the call price and how is it determined?  (Read 1655 times)

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Offline knircky

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I've removed the Fee Rate since it was just confusing in the Exchange, for the record it's the price at which an asset, say USD, will be converted to BTS in order to pay for fees.

The settlement price is the price which used to be called the Feed Price.

The Margin Call Price is the Settlement Price * Squeeze Protection Ratio (initially at 1.5, now somewhere around 1.1)

Your margin position will get margin called if the call price of the position falls below the margin call price.

2. Margin calls are triggered by the price of the cheapest available asset on the internal market, not by the feed price.  When a margin call is triggered, the collateral will be used to buy any of the asset that's available for sale cheaper than [feed price * maximum short squeeze ratio] to cover the position.  It will not touch any other assets in the users account, even if they could be used to cover the position.

This isn't a complete answer, but I hope it helps.

This is almost correct except for the following:

1. Margin called orders will not buy the cheapest assets available, they will only buy within the range from their call price to the margin call price

2. They won't buy anything at all if there is a sell order below the above range

As an example, say the feed price of USD is 200, margin call price is 300. A sell order is on the books at 225, one call order is margin called at 275.

Result: nothing.

Someone tries to sell at 299: still nothing.

The sell at 225 is cancelled: the margin called order fills immediately at 299.

Imo this is crazy and the margin order should be allowed to buy USD down to the feed price if any is available.

It should also use any USD the holder has in their balance instead of being forced to buy on the open market at a premium.

 i think this makes a lot of sense:

1. any USD the account has should be used to settle the account (the goal is to protect the asset not screw the shorter)

2. whatever USD the shorter needs to cover should be bought at the cheapest way possible as long as its below margin call price.

3. If the margin call price of the market  is above the margin call price of the holder the asset holder should be forced to buy USD at the price of its margin call price or better if possible (i.e. 225 in the example above) and never at 299.

Offline svk

It should also use any USD the holder has in their balance instead of being forced to buy on the open market at a premium.

and why is that not happening ?
Cause those are the rules I guess?
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Offline liondani

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It should also use any USD the holder has in their balance instead of being forced to buy on the open market at a premium.

and why is that not happening ?

Offline svk



I've removed the Fee Rate since it was just confusing in the Exchange, for the record it's the price at which an asset, say USD, will be converted to BTS in order to pay for fees.

The settlement price is the price which used to be called the Feed Price.

The Margin Call Price is the Settlement Price * Squeeze Protection Ratio (initially at 1.5, now somewhere around 1.1)

Your margin position will get margin called if the call price of the position falls below the margin call price.

2. Margin calls are triggered by the price of the cheapest available asset on the internal market, not by the feed price.  When a margin call is triggered, the collateral will be used to buy any of the asset that's available for sale cheaper than [feed price * maximum short squeeze ratio] to cover the position.  It will not touch any other assets in the users account, even if they could be used to cover the position.

This isn't a complete answer, but I hope it helps.

This is almost correct except for the following:

1. Margin called orders will not buy the cheapest assets available, they will only buy within the range from their call price to the margin call price

2. They won't buy anything at all if there is a sell order below the above range

As an example, say the feed price of USD is 200, margin call price is 300. A sell order is on the books at 225, one call order is margin called at 275.

Result: nothing.

Someone tries to sell at 299: still nothing.

The sell at 225 is cancelled: the margin called order fills immediately at 299.

Imo this is crazy and the margin order should be allowed to buy USD down to the feed price if any is available.

It should also use any USD the holder has in their balance instead of being forced to buy on the open market at a premium.
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Offline liondani

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When a margin call is triggered, the collateral will be used to buy any of the asset that's available for sale cheaper than [feed price * maximum short squeeze ratio] to cover the position.

I think max squeeze short is 10% (from 50% it was) so it is more possible that on a thin market like now it will not find on the open market all the bitAsset needed to close the position... In that case will the system wait like on bts1 until the price feed is in a range of 10% from the price feed and find the remaining asset's? What happens if the price never comes back to the price range it can collect the remaining assets?

I definitely think 10% must increase soon so the market will define the "fair" prices and the exchange  will not be so much feed depended... less vulnerable to feed manipulation... can we find the sweet spot?
can the system automatically increase the squeeze protection spread when for example the 24h volume is high and decrease it when the volume is very low?Make it sense?

Offline Troglodactyl

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I've removed the Fee Rate since it was just confusing in the Exchange, for the record it's the price at which an asset, say USD, will be converted to BTS in order to pay for fees.

The settlement price is the price which used to be called the Feed Price.

The Margin Call Price is the Settlement Price * Squeeze Protection Ratio (initially at 1.5, now somewhere around 1.1)

Your margin position will get margin called if the call price of the position falls below the margin call price.

First off. Thank you for this answer. I have learned a bit from your answers, but i am still a bit confused.

1. I do not understand the fee rate. I cannot imagine why there is a fee or what it is for. Does this account for the penalty that we pay when we get margin called of 5%. Is that what this fee represents? Could you explain this fee please.

2. I understand that when we loan USD into existence we need to put up collateral of 1.75 the value. If i understand correctly should the price change so much that our collateral becomes less than the margin call price  (1.1) we would get margin called. That means our position would be closed, the collateral would be used to force us to buy the USD we need to close the position. I don't understand the price that would be used and who would sell us the USD. Is it so that we would simply get the best price at the market?  So whoever has put up the best sell price for the amount of USD that we need to close the position would get our BTS from our collateral. What happens if the collateral is less than the best sell price? Or if there is no seller? What would happen if we had USD on our account. Would I simply use the USD from my account and get my collateral back?

1. The fee rate has nothing to do with margin calls.  All transaction fees are ultimately payed in BTS, so if a user has no BTS he automatically trades the asset in which he's transacting for BTS to pay the fee.  Each asset has a "fee pool" of BTS to support this, and the trade takes place at the fee rate.  The fee pool I believe is funded by the asset issuer.

2. Margin calls are triggered by the price of the cheapest available asset on the internal market, not by the feed price.  When a margin call is triggered, the collateral will be used to buy any of the asset that's available for sale cheaper than [feed price * maximum short squeeze ratio] to cover the position.  It will not touch any other assets in the users account, even if they could be used to cover the position.

This isn't a complete answer, but I hope it helps.

Offline knircky

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I've removed the Fee Rate since it was just confusing in the Exchange, for the record it's the price at which an asset, say USD, will be converted to BTS in order to pay for fees.

The settlement price is the price which used to be called the Feed Price.

The Margin Call Price is the Settlement Price * Squeeze Protection Ratio (initially at 1.5, now somewhere around 1.1)

Your margin position will get margin called if the call price of the position falls below the margin call price.

First off. Thank you for this answer. I have learned a bit from your answers, but i am still a bit confused.

1. I do not understand the fee rate. I cannot imagine why there is a fee or what it is for. Does this account for the penalty that we pay when we get margin called of 5%. Is that what this fee represents? Could you explain this fee please.

2. I understand that when we loan USD into existence we need to put up collateral of 1.75 the value. If i understand correctly should the price change so much that our collateral becomes less than the margin call price  (1.1) we would get margin called. That means our position would be closed, the collateral would be used to force us to buy the USD we need to close the position. I don't understand the price that would be used and who would sell us the USD. Is it so that we would simply get the best price at the market?  So whoever has put up the best sell price for the amount of USD that we need to close the position would get our BTS from our collateral. What happens if the collateral is less than the best sell price? Or if there is no seller? What would happen if we had USD on our account. Would I simply use the USD from my account and get my collateral back?




Offline boombastic

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Offline svk

I've removed the Fee Rate since it was just confusing in the Exchange, for the record it's the price at which an asset, say USD, will be converted to BTS in order to pay for fees.

The settlement price is the price which used to be called the Feed Price.

The Margin Call Price is the Settlement Price * Squeeze Protection Ratio (initially at 1.5, now somewhere around 1.1)

Your margin position will get margin called if the call price of the position falls below the margin call price.
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Offline knircky

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For a pegged asset:

What is the call price and how is it determined?

I was just able to sell 5 USD at a price that was way above what i thought the market price was.

The front end provides 3 prices for the USD asset. Is there a place this is defined or can someone explain it?

Fee Rate
219.73947
BTS/USD

Settlement Price
209.27632
BTS/USD

Margin Call Price
313.91447
BTS/USD