BitUSD question?

[tonyk]

Toast those are all implementation DETAILS:
He wants to know how it works,  no every detail how you implemented the general idea.

[EDIT]
Plus if 5-7 the way I described is far better than the nonsense actual implementation.

[santaclause102]

Even with that requirement the order is wrong, you put up collateral in step 2 not 4

Also steps 5 to 7, that wouldnt happen. You don't reset the "-1" to "0" just because you bought, you have to actively cover otherwise you just hold your bitusd.

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toast, can you make a list like tonyk did?

[toast]

Even with that requirement the order is wrong, you put up collateral in step 2 not 4

Also steps 5 to 7, that wouldnt happen. You don't reset the "-1" to "0" just because you bought, you have to actively cover otherwise you just hold your bitusd.

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[tonyk]

I thought that you might do it like this so I put:
!!! This is principally how it works – implementation might make necessary to have say B>=2X in p.4

[toast]

I don't think that's right... you put up 2x collateral at the time you place the order. The bts you trade the bitusd for and your margin are separate. You never have negative balance, just locked collateral

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[tonyk]

Just give me one example where you sell 1bitusd using collateral and buy it back.

1.You start with B BTS in your account.
2. You place an order : sell 1 bitUSD @ X bitUDS/BTS
3. If your order is match with buy bitUSD order (i.e. there is a buy order >=1 BitUSD @ Y>X)
4. You have now '-1' bitUSD in your account. Also B+X BTS in your account (B originally there and X received from the trade). Those B+X BTS are collateral of your '-1' bitUSD. (meaning you cannot do anything with them until you buy 1 bitUSD); Also  at 2x margin for the trade to occure: B>= X;
.....
5. At some point in time you place an order: buy 1 bitUSD @ Z bitUDS/BTS
6. If your price Z >= of the best sell's offers price, a trade occurs =>
7. You end up with 0 bitUSD in your account and B+X-Z BTS.

!!! This is principally how it works – implementation might make necessary to have say B>=2X in p.4

[liondani]

I sell 1 BTS for $10 giving me 10 bitUSD. What collateral is used, if I had no BTS to short in the first place.  Since naked shorting isn't happening, wouldn't shorting just be a closing of a BTS position?

You ask too many question mixed with too many statements. if you ask one question at a time I might be able to help you.
But I must figure out what you do not get/what you get wrong, first.

Here is a reading before you start asking q (if you prefer):
Think of BTS as the currency and of  bitUSD as futures contracts; bitUSD are futures contracts with: – 1. no expiration/delivery date; 2. no actual delivery;
http://www.ftpress.com/articles/article.aspx?p=1436919&seqNum=6
http://www2.hmc.edu/~evans/e104l12.pdf

Just give me one example where you sell 1bitusd using collateral and buy it back.


They way I am seeing it is BTS and bitUSD are different denominations of the same thing. If BTS is worth $1, then they are both the same thing with different names. You sell bitUSD, you get BTS. You sell BTS, you get bitUSD.

So when one day  $1= €1   then   $ = €  ?   :o  (same value don't mean same thing)

[NewMine]

I sell 1 BTS for $10 giving me 10 bitUSD. What collateral is used, if I had no BTS to short in the first place.  Since naked shorting isn't happening, wouldn't shorting just be a closing of a BTS position?

You ask too many question mixed with too many statements. if you ask one question at a time I might be able to help you.
But I must figure out what you do not get/what you get wrong, first.

Here is a reading before you start asking q (if you prefer):
Think of BTS as the currency and of  bitUSD as futures contracts; bitUSD are futures contracts with: – 1. no expiration/delivery date; 2. no actual delivery;
http://www.ftpress.com/articles/article.aspx?p=1436919&seqNum=6
http://www2.hmc.edu/~evans/e104l12.pdf

Just give me one example where you sell 1bitusd using collateral and buy it back.


They way I am seeing it is BTS and bitUSD are different denominations of the same thing. If BTS is worth $1, then they are both the same thing with different names. You sell bitUSD, you get BTS. You sell BTS, you get bitUSD.

[Agent86]

How does one short bitUSD?

Given the following:

Let's say BTS is trading at $10.

1BTS is then worth 10bitUSD

I am not seeing how you could even short bitUSD.  I see you can short BTS.

In order to short a bitUSD $1 would have to end up being worth less than $1, which isn't possible. $1 will always be $1, just what you can buy with that is what changes.

So let's take shorting BTS:

I sell 1 BTS for $10 giving me 10 bitUSD. What collateral is used, if I had no BTS to short in the first place.  Since naked shorting isn't happening, wouldn't shorting just be a closing of a BTS position?

If anyone has a full trade examples of what happens with bitUSD, that would be great!

When "short bitUSD" you are not predicting it goes down relative to the dollar, you are predicting it goes down relative to BTS.

The transaction is:
A person agrees to give you $10 worth BTS (at today's exchange rate) in exchange for an IOU $10 worth of BTS (at whatever the exchange rate is at that time).  1 bitUSD = IOU 1 dollar's worth of BTS.

I think this may help:
http://invictus-innovations.com/bookie-bob

[tonyk]

I sell 1 BTS for $10 giving me 10 bitUSD. What collateral is used, if I had no BTS to short in the first place.  Since naked shorting isn't happening, wouldn't shorting just be a closing of a BTS position?

You ask too many question mixed with too many statements. if you ask one question at a time I might be able to help you.
But I must figure out what you do not get/what you get wrong, first.

Here is a reading before you start asking q (if you prefer):
Think of BTS as the currency and of  bitUSD as futures contracts; bitUSD are futures contracts with: – 1. no expiration/delivery date; 2. no actual delivery;
http://www.ftpress.com/articles/article.aspx?p=1436919&seqNum=6
http://www2.hmc.edu/~evans/e104l12.pdf

[NewMine]

How does one short bitUSD?

Given the following:

Let's say BTS is trading at $10.

1BTS is then worth 10bitUSD

I am not seeing how you could even short bitUSD.  I see you can short BTS.

In order to short a bitUSD $1 would have to end up being worth less than $1, which isn't possible. $1 will always be $1, just what you can buy with that is what changes.

So let's take shorting BTS:

I sell 1 BTS for $10 giving me 10 bitUSD. What collateral is used, if I had no BTS to short in the first place.  Since naked shorting isn't happening, wouldn't shorting just be a closing of a BTS position?

If anyone has a full trade examples of what happens with bitUSD, that would be great!