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Offline toast


You know there's no penalty for just letting it expire right?
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Offline merlin0113

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #1 on: January 08, 2015, 12:15:13 AM »
You know there's no penalty for just letting it expire right?

Please elaborate this!

Offline lil_jay890

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #2 on: January 08, 2015, 12:17:29 AM »
Wow I really thought my short order would get filled when all those guys had to cover...  it was a ton of orders and I'm offering 5% on bitusd.

It actually looks like the short was the same person with several orders out.  He put in a new short at the highest interest rate (6.14) and basically rolled over his short by covering into those orders.
« Last Edit: January 08, 2015, 12:19:51 AM by lil_jay890 »

Offline roadscape

Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #3 on: January 08, 2015, 12:22:23 AM »
Lol.. For some reason I thought that margin calls happen in the 'time' dimension as well :D
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Offline merlin0113

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #4 on: January 08, 2015, 12:22:36 AM »
Wow I really thought my short order would get filled when all those guys had to cover...  it was a ton of orders and I'm offering 5% on bitusd.

I was being confident about short successfully by offering 0 interests since one month earlier it did. So bad I missed it.

Offline arhag

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #5 on: January 08, 2015, 12:46:37 AM »
You know there's no penalty for just letting it expire right?

Although it is probably safe to assume this shorter didn't know there was no penalty, is there not generally a situation where covering your short right before it expires would be beneficial?

For example, let's say people are selling BitUSD (not short selling) under the price feed. Perhaps you would need to cover at a loss and for that reason you have avoided covering your short in the hope that the price will go up. But there is only 20 minutes left before your short expires so you no longer have any hope of that occurring. Wouldn't you prefer to make several bids for BitUSD at each unique price that it is being offered at, and then use that BitUSD to manually cover your short, rather than letting the market do it for you at the price feed? I guess that depends on how the auto-covering is implemented. Is it a limit order or is it a WYAIWYG order? If it's the latter you will end up paying more BTS of your collateral than necessary in the autocover, where the excess would go towards paying the overlap that gets distributed to BitUSD holders as yield.

Offline merlin0113

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #6 on: January 08, 2015, 12:54:03 AM »
You know there's no penalty for just letting it expire right?

Although it is probably safe to assume this shorter didn't know there was no penalty, is there not generally a situation where covering your short right before it expires would be beneficial?

For example, let's say people are selling BitUSD (not short selling) under the price feed. Perhaps you would need to cover at a loss and for that reason you have avoided covering your short in the hope that the price will go up. But there is only 20 minutes left before your short expires so you no longer have any hope of that occurring. Wouldn't you prefer to make several bids for BitUSD at each unique price that it is being offered at, and then use that BitUSD to manually cover your short, rather than letting the market do it for you at the price feed? I guess that depends on how the auto-covering is implemented. Is it a limit order or is it a WYAIWYG order? If it's the latter you will end up paying more BTS of your collateral than necessary in the autocover, where the excess would go towards paying the overlap that gets distributed to BitUSD holders as yield.

Thanks for this post, now I know better about the expire rules.

Offline jshow5555

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #7 on: January 08, 2015, 12:57:26 AM »
Well, I for one believe he did the right thing for himself.

As in he shorted most of his position yet again. Has he been waiting for those shorts to expire, me and a ton of you it seems, would have sold him enough bitUSD to cover but we would have precluded him from re-shorting....
It is king of long term/bigger approach, what she did.

Offline merlin0113

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #8 on: January 08, 2015, 01:07:47 AM »
Well, I for one believe he did the right thing for himself.

As in he shorted most of his position yet again. Has he been waiting for those shorts to expire, me and a ton of you it seems, would have sold him enough bitUSD to cover but we would have precluded him from re-shorting....
It is king of long term/bigger approach, what she did.

yes, and I guess he figured it out over the passed month.

Offline mf-tzo

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #9 on: January 08, 2015, 01:28:31 PM »
I am still very confused about what I need to do in this case when I see that other big short positions are expiring...

I thought that since he will need to cover his position, there would have been a demand for bitusd increasing the bitusd above the peg and that BTS as a result of this would also increase. But that didn't happen.

I had a profitable short position open and I thought I should cover with my bitusd before the big orders expired and re open my short position at a lower interest rate. Since I thought there would be a demand for bitusd, I thought that I would be able to re open my short position. That didn't happen either so I ended up covering my short position without beeing able to re open..

Basically, although I really like the whole BTS forex happening, I am still not clear of what is happening and how to properly trade. I keep making mistakes I think. It will be nice if there is a more advanced trading tutorial teaching us the mechanics with examples and what we should expect when we see that and that and that etc in order to make more correct trading decisions.. for example when you see that ... on the graph it means that...
when you see the peg is below and shorts are about to expire this means that...
etc etc..


Offline vlight

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #10 on: January 08, 2015, 01:55:56 PM »
You have to buy BitUSD cheaply and then sell it just below the price feed. The hardest thing is to know when exactly to do it. If you do it too early, you risk that BitUSD price will go against you. Your short order did not get filled because possibly the same person shorted against himself by using higher interest rate. In order to short, he had to buy all sell orders up to the price feed. This is where your BitUSD sell orders should have been.
« Last Edit: January 08, 2015, 01:57:47 PM by vlight »

Offline vlight

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #11 on: January 08, 2015, 02:05:00 PM »
You know there's no penalty for just letting it expire right?

Or is there?

1) We assume a trusted price feed exists
2) We assume an asset with no counter party and sufficient market liquidity at a market established price (Bitcoin, BTS)
3) Two parties enter a "contract for difference" on the price feed, the short-side puts up 2x and the long side puts up 1x for a total of 3x held as collateral for issuance of BitUSD
4) The short may cover (burn BitUSD) at any time to gain access to the 3x collateral.
5) The short is forced to cover after 30 days by accepting any and all orders at or above the price feed.
6) The short is forced to cover if the price feed results in the value of collateral being equal to 2x or less the value of the BitUSD.
7) Shorts can only execute at the price feed (no selling BitUSD to 0)
8) Margin calls only happen at the price feed (no manipulating the internal market to cause a short squeeze)
9) Shorts are matched prioritized by interest rate they are willing to pay.

If the expiring short is large enough, will it not force to buy above the price feed?
« Last Edit: January 08, 2015, 03:38:08 PM by vlight »

Offline toast

Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #12 on: January 08, 2015, 03:29:53 PM »
I actually think thats nit the case atm, but wven if it were, hiw is that a penalty? You'd have to buy whatever bitusd is there anyway

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Offline Agent86

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #13 on: January 08, 2015, 03:40:54 PM »
You know there's no penalty for just letting it expire right?

Or is there?

1) We assume a trusted price feed exists
2) We assume an asset with no counter party and sufficient market liquidity at a market established price (Bitcoin, BTS)
3) Two parties enter a "contract for difference" on the price feed, the short-side puts up 2x and the long side puts up 1x for a total of 3x held as collateral for issuance of BitUSD
4) The short may cover (burn BitUSD) at any time to gain access to the 3x collateral.
5) The short is forced to cover after 30 days by accepting any and all orders at or above the price feed.
6) The short is forced to cover if the price feed results in the value of collateral being equal to 2x or less the value of the BitUSD.
7) Shorts can only execute at the price feed (no selling BitUSD to 0)
8) Margin calls only happen at the price feed (no manipulating the internal market to cause a short squeeze)
9) Shorts are matched prioritized by interest rate they are willing to pay.

If the expiring short is large enough, will it not force to buy above the price feed?

When Dan says "above the price feed"  I think he means below the price feed (He views the market inverse of most people).  As far as I know, right now expiring shorts just form a buy wall at the feed.  Regardless, I think it will be changed so that shorts really can be forced to cover above the price feed which I think is better.

Offline vlight

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Re: ok which one of you covered their shorts 20 minutes before they expired?
« Reply #14 on: January 08, 2015, 03:56:27 PM »
I actually think thats nit the case atm, but wven if it were, hiw is that a penalty? You'd have to buy whatever bitusd is there anyway

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Ok, if it were the case you could short against yourself, you don't have to buy above the price feed for a premium price. You may end up with some BitUSD that you will have to sell to the market, but if you split everything to small enough orders, the market will be able to absorb the remaining BitUSD.

When Dan says "above the price feed"  I think he means below the price feed (He views the market inverse of most people).  As far as I know, right now expiring shorts just form a buy wall at the feed.  Regardless, I think it will be changed so that shorts really can be forced to cover above the price feed which I think is better.

Haha, this now gets even more confusing. Up until that BM post, i thought the same.

My current understanding is that 'buy wall at the feed' exists only when there are no sell orders. If there are sell orders it will buy any sell order even for a very high price. I do not think that this is better at all. :D
« Last Edit: January 08, 2015, 04:14:46 PM by vlight »

 

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