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Offline btcwagering

How are Short Sell Orders Executed?
« on: February 23, 2015, 04:21:34 PM »

Under what conditions is a short sale order actually executed (ie units borrowed from the system and placed on the market)?

Last night I tried to short BitUSD, providing a sell price equal or less than the highest bid price. I checked it today and the order was not executed. Because it is unclear what to specify for the APY, I thought maybe this was why it didn't execute.

So today I tried another short with a higher yield and still nothing.

This is very frustrating and I highly recommend more transparency on how this works as well as what to specify for yield.
« Last Edit: February 23, 2015, 04:24:27 PM by btcwagering »

Offline lil_jay890

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Re: How are Short Sell Orders Executed?
« Reply #1 on: February 23, 2015, 05:01:57 PM »
There are currently no liquidity providers, so your order will not be filled immediately.  It can often take days to get a short order filled.  There needs to be someone willing to buy bitUSD in order for you to be able to short.  Offering a higher APY just moves you to the top of the list when someone is looking to buy bitUSD.

Offline lafona

Re: How are Short Sell Orders Executed?
« Reply #2 on: February 23, 2015, 05:10:37 PM »
If you think it might be the APY offered you can look at the list of competing shorts to see where yours falls(it show up as a box under the Sell Orders box in the gui). If there are some big shorts offering higher APY then there is a good chance that is why it didn't get filled. The other condition too look for is if there is any demand to buy BitUSD at the feed price. When BitUSD demand is low, you will probably find less or no demand to buy at the feed price and have a tough time getting a short filled. Hope this helps
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Offline btcwagering

Re: How are Short Sell Orders Executed?
« Reply #3 on: February 23, 2015, 06:17:19 PM »
Last night I tried to short BitUSD, providing a sell price equal or less than the highest bid price.

The inputed short sell price should have matched the highest buy price on the order book, but nothing happened.

I did look at the other short orders and posted a favorable APY, again to no effect.

The question remains, how exactly does the short sale execution work? It is very opaque as is the appropriate APY and that is a problem.


Offline liondani

Re: How are Short Sell Orders Executed?
« Reply #4 on: February 23, 2015, 06:55:41 PM »
short on market feed price letting the prize field at zero ... to low volume to give a specific prize value...

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Offline lil_jay890

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Re: How are Short Sell Orders Executed?
« Reply #5 on: February 23, 2015, 07:52:54 PM »
Last night I tried to short BitUSD, providing a sell price equal or less than the highest bid price.

The inputed short sell price should have matched the highest buy price on the order book, but nothing happened.

I did look at the other short orders and posted a favorable APY, again to no effect.

The question remains, how exactly does the short sale execution work? It is very opaque as is the appropriate APY and that is a problem.

You can't short below the feed price...  The resting bitUSD buy orders are usually located below the feed price and this is why you cannot do a "market" short.  If the feed price starts moving lower, it will eventually hit the resting bitUSD buy orders and this will initialize the short orders on the books.  Shorts will be filled in order of highest offered APY.  Offering a very high APY will only gaurantee that you get filled first once the feed price moves into the buy orders.

Look on https://bitsharesblocks.com/asset/orderbook?asset=USD and notice the Green orders that terminate at the dotted feed line.  These are the current short orders.  They cannot short below the dotted line.  Once the dotted line starts moving lower into the buy orders, the shorts will be filled.

Offline liondani

Re: How are Short Sell Orders Executed?
« Reply #6 on: February 23, 2015, 08:51:33 PM »
Last night I tried to short BitUSD, providing a sell price equal or less than the highest bid price.

The inputed short sell price should have matched the highest buy price on the order book, but nothing happened.

I did look at the other short orders and posted a favorable APY, again to no effect.

The question remains, how exactly does the short sale execution work? It is very opaque as is the appropriate APY and that is a problem.

You can't short below the feed price...  The resting bitUSD buy orders are usually located below the feed price and this is why you cannot do a "market" short.  If the feed price starts moving lower, it will eventually hit the resting bitUSD buy orders and this will initialize the short orders on the books.  Shorts will be filled in order of highest offered APY.  Offering a very high APY will only gaurantee that you get filled first once the feed price moves into the buy orders.

Look on https://bitsharesblocks.com/asset/orderbook?asset=USD and notice the Green orders that terminate at the dotted feed line.  These are the current short orders.  They cannot short below the dotted line.  Once the dotted line starts moving lower into the buy orders, the shorts will be filled.

Because of continues price moving if you leave price limit at zero, it is almost like "market" short... (buy orders below price feed will often reached by the price feed before canceled+new buy orders at current price feeds)
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Offline btcwagering

Re: How are Short Sell Orders Executed?
« Reply #7 on: February 23, 2015, 09:23:50 PM »
Correct me if I'm wrong but the summary is this:

My order was never executed because of a market condition where the execution price would be below the feed price?

And as for APY this simply provides ordering for which orders would be executed first?

And the reason for this restriction (can't short below the feed price) is to protect the bitAsset price from being cascaded downward?

This is all very helpful information. It would be GREAT for the project to have this info in an easy to find place, like the FAQ on bitshares.org, seeing as the ability to short is maybe the coolest feature of the exchange right now.

Offline lil_jay890

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Re: How are Short Sell Orders Executed?
« Reply #8 on: February 23, 2015, 09:55:22 PM »
You got it

I also agree that this should be posted somewhere useful.  I was in your same position when I first tried to short and none of my orders were getting filled.

Offline btcwagering

Re: How are Short Sell Orders Executed?
« Reply #9 on: February 23, 2015, 10:15:02 PM »
Thanks, so the next question is, if no one can short under these conditions (highest bid lower than feed price), how is additional bitAsset liquidity created in the system? I assume the answer is - it isn't - meaning that the market is deadlocked in a sense. Again I can see why this protection is in place (protect the price of bitAssets), but without significant external demand for bitAssets (ie, people doing real things with them like spending them), the market can stagnate for long periods of time.

Wouldn't it be better if we allowed shorting below the feed price, but within a range (5-10%, say) of the feed price? And if you want to stimulate demand for bitAssets, enforce a higher APY when selling below the feed price.

Having locked-up markets can't be good for anybody, can it?

Offline Markus

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Re: How are Short Sell Orders Executed?
« Reply #10 on: February 23, 2015, 11:17:29 PM »
If the price of a bitAsset is below the feed there is no need for additional supply - so no need for shorts to go through.

When demand for a bitAsset picks up the price will rise to (and sometimes even above) the feed price at which shorts are executed, increasing the supply.

The only reason for the APY is to sort the queued short orders at the feed price.
Once trading happens above (not at) the feed price APY is typically zero.

Said all this, normal selling (and buying) can happen at any prices, so the market is not "locked up". Only shorting is restricted in the manner described above.

Offline btcwagering

Re: How are Short Sell Orders Executed?
« Reply #11 on: February 24, 2015, 12:52:02 AM »
If the price of a bitAsset is below the feed there is no need for additional supply - so no need for shorts to go through.

This depends on your perspective (that of the system wanting perfect parity with the pegged asset). However from the perspective of market participants, any additional trade is a good / necessary one, else they wouldn't make it.

The demand for bitAssets is naturally higher at a lower price, probably sharply higher because everyone has some doubt as to the actual ability of the system to track the real-life assets. Hence people want a discount on the feed price.

In addition to being able to track the actual assets, one of the metrics bitshares will be judged by (and invested in or not) is trading volume / liquidity of the major issues (bitUSD, bitBTC, etc). So it is a trade off between guarding the "perfect peg" (which can never be truly perfect obviously) and creating action in the market.

I believe a slight shift off of the peg (5-10%) is inevitable and acceptable to market participants, so we should build that leeway into the system and gain the advantage of increased volume and liquidity.

 

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