Covering Shorts

arhag · February 14, 2015, 06:30:32 PM

Quote from: pc on February 14, 2015, 06:27:47 PM
Quote from: arhag on February 14, 2015, 04:38:13 PM
Quote from: pc on February 14, 2015, 04:25:37 PM
It will use the collateral to buy BitGOLD at the price feed or up to 10% above.

No, it shouldn't. That is only for margin called covers not expired covers. Expired covers should buy up to the price feed but no higher. If there are not enough sells at (or below) the price feed to cover the debt, it will just sit at the price feed (with the locked BTS collateral) until it is fully covered.

The current implementation executes expired covers at feed price or 10% above. AFAIK it is planned to change this in a future release.

Good to know. Thanks.

pc · February 14, 2015, 06:27:47 PM

Quote from: arhag on February 14, 2015, 04:38:13 PM
Quote from: pc on February 14, 2015, 04:25:37 PM
It will use the collateral to buy BitGOLD at the price feed or up to 10% above.

No, it shouldn't. That is only for margin called covers not expired covers. Expired covers should buy up to the price feed but no higher. If there are not enough sells at (or below) the price feed to cover the debt, it will just sit at the price feed (with the locked BTS collateral) until it is fully covered.

The current implementation executes expired covers at feed price or 10% above. AFAIK it is planned to change this in a future release.

arhag · February 14, 2015, 04:38:13 PM

Quote from: pc on February 14, 2015, 04:25:37 PM
It will use the collateral to buy BitGOLD at the price feed or up to 10% above.

No, it shouldn't. That is only for margin called covers not expired covers. Expired covers should buy up to the price feed but no higher. If there are not enough sells at (or below) the price feed to cover the debt, it will just sit at the price feed (with the locked BTS collateral) until it is fully covered.

mdj, if you have enough BTS left over (outside of the collateral) then you can self-short again and use the BitGold to cover your old short (effectively rolling over the short). It would be smart to do this now rather than waiting for expiration if you believe the price of BTS will further fall (relative to gold) from its current price by the time the short expires. If you are hopeful that it will go up by then, then I would wait until expiration time. At that point, if there are not enough BitGold sell orders at or below the price feed and you are eager to get back your BTS (even if it is at a loss) then you can match the expired cover with a new short (assuming you have enough BTS to short sell enough BitGold to fully match the expired cover).

pc · February 14, 2015, 04:25:37 PM

It will use the collateral to buy BitGOLD at the price feed or up to 10% above. If you want to avoid that, you have to find BitGOLD elsewhere - one option is shorting to yourself again. Note that your collateral stays locked until the cover is fully paid up.

mdj · February 14, 2015, 03:23:47 PM

I shorted BitGold to myself, in order to cover, I would need to short it to myself again as there is nobody actively selling at feed price. If I leave it to expire and cover automatically, would it buy from the overpriced orders thus making me better of just constantly buying my own shorts to pay of shorts? Or does it take it from the collateral I put up?