Normally I'd post this in the newbie section but there isn't many eyes over there lately.
I'm trying to dig into the concept of BitAssets and really understand them. About the only thing about them I believe I do understand is the psychological basis for why a BitAsset like BitUSD trades near $1. I don't see how that holds true for other assets like gold, silver & oil where the consensus value is more volatile.
It doesn't help that my grasp on futures trading is not rock solid either. I can't seem to retain if a short is a contract you buy when you want the value to go down or if that's the "long" position. As I analyze that now my guess is that short is you want the value to go down to make a profit and long the value to rise to make a profit. So that is one basic question.
When I read the BitShares wiki entry for BitAssets the opening paragraph was enough to motivate me to write this post. Then under Initial Creation
I read this:
BitAssets are created whenever a short is matched with a buyer at a price set by the median price feed which is provided by delegates.
And was further confused by not understanding what a price feed is, how the delegates set it, on what basis they do so and whether it's individually set by each delegate or some sort of cooperation or consensus is at play.
Other questions related to futures trading procedure are:
1) what do I buy BitUSD with, BTC coins, BTSX shares, or any of the above at bter btc38 or other exchanges where BitUSD is traded?
2) can I buy BitUSD in my BitShares client directly without using an exchange?
3) do I need to "put up" some bond or form of collateral to buy BitUSD, since it's value is based on trade speculation?
4) if no to #3, do I have to "put up" collateral to short or go long on BitUSD?
If you'd prefer to discuss this with me on mumble I'll be listening in backroom #3 (just drag your username from the conference hall to backroom 3), or you could respond here. I really need to get these things nailed down in my brain.