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Offline Gentso1

bitUSD price
« on: August 23, 2014, 02:09:58 PM »

I want to make sure I understand this price correctly before we start trading on Monday so please tell me if my math is correct. Please understand I have no trading experience other then a quick read of some definitions and I have no real intention of going short or long because I don't understand it well enough.

Here is a capture of the current market


The first buy order is for, Short   0.008898,   224,762.00019,   2,000.0000   

So this person wants to buy bitUSD at a price of .008898 btsx each. At the current market price of .0000529 per btsx and a current btc price of 507.29 that gives us a fiat value of 0.026835641 per share of btsx.

224,762.00019btsx *.0000529 btsx per btc=11.88990981 btc=6031.63 fiat value=3.015815 fiat price per share of bitUSD

I know I have to be missing something here. Is this person just trying to get the first bitUSD? What are ways they can profit when paying 3.015815 fiat for 1 bitUSD.
(*I think I see it, They are betting there will be a massive drop in the price of btsx) If this is their play how do you figure out how much of a drop they need to profit.  Why not just sell btsx on the exchange and get 11.88990981 btc then convert to fiat and have 6031.63? Whats could be the possible motivation for  buying bitUSD at roughly 3 times the price of fiat?

I am sure the above will seem obvious to actual traders so dumb it down for me. I don't really want to day trade but I do like having a basic understanding why things are happening. Thanks

(P.S, for the love of all things crypto we need to change USD to bitUSD.)





Offline bytemaster

Re: bitUSD price
« Reply #1 on: August 23, 2014, 02:14:53 PM »
The short order was placed over a week ago and has not been canceled.   


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Offline Gentso1

Re: bitUSD price
« Reply #2 on: August 23, 2014, 02:17:38 PM »
The short order was placed over a week ago and has not been canceled.   


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lol that make sense as the price of btsx was much lower then.  I was doing all this and scratching my head going really?

Offline bitmeat

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Re: bitUSD price
« Reply #3 on: August 23, 2014, 02:21:59 PM »
I know I have to be missing something here. Is this person just trying to get the first bitUSD? What are ways they can profit when paying 3.015815 fiat for 1 bitUSD.
(*I think I see it, They are betting there will be a massive drop in the price of btsx) If this is their play how do you figure out how much of a drop they need to profit.  Why not just sell btsx on the exchange and get 11.88990981 btc then convert to fiat and have 6031.63? Whats could be the possible motivation for  buying bitUSD at roughly 3 times the price of fiat?

Those who short BitUSD, are actually expecting rise in BTSX, not drop. It is going to be very interesting to see how this unfolds, but this is the only chain that allows margin.

In other words those who short BitUSD are putting up their BTSX stake as a margin. It's like buying more BTSX with BTSX. :)

Offline speedy

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Re: bitUSD price
« Reply #4 on: August 23, 2014, 02:30:14 PM »
I still find the terminology really confusing. Its not clear to me whether Bids means you are bidding for BTSX using bitUSD or vice versa.  ???

I wish the gui would remind me which is which in the column headers.

Offline Riverhead

Re: bitUSD price
« Reply #5 on: August 23, 2014, 02:32:07 PM »
It does now in 0.4.7 :)



Offline speedy

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Re: bitUSD price
« Reply #6 on: August 23, 2014, 02:33:31 PM »
It does now in 0.4.7 :)




Aah much better :)

Offline tonyk

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Re: bitUSD price
« Reply #7 on: August 23, 2014, 03:03:35 PM »
It does now in 0.4.7 :)




Is it really changed tho in 0.4.7? What does it say when you switch the market to BTSX : BitUSD?


Pic 0.4.5
« Last Edit: August 23, 2014, 03:09:32 PM by TheOnion »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Riverhead

Re: bitUSD price
« Reply #8 on: August 23, 2014, 03:05:20 PM »
I see this. I guess it makes sense you can't short BTSX as the supply is (kinda) fixed.



Offline Akado

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Re: bitUSD price
« Reply #9 on: August 24, 2014, 08:42:28 PM »

Those who short BitUSD, are actually expecting rise in BTSX, not drop. It is going to be very interesting to see how this unfolds, but this is the only chain that allows margin.

In other words those who short BitUSD are putting up their BTSX stake as a margin. It's like buying more BTSX with BTSX. :)

could someone explain this to me in other words and in a more detailed way please? I didn't understand how it would work
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Offline Xeldal

Re: bitUSD price
« Reply #10 on: August 24, 2014, 09:27:41 PM »

Those who short BitUSD, are actually expecting rise in BTSX, not drop. It is going to be very interesting to see how this unfolds, but this is the only chain that allows margin.

In other words those who short BitUSD are putting up their BTSX stake as a margin. It's like buying more BTSX with BTSX. :)

could someone explain this to me in other words and in a more detailed way please? I didn't understand how it would work

When you 'short' something, you are selling it, without actually owning it to begin with.  A short also has a promise to buy back at a later time.  This is called covering your short.

So when you short bitUSD, you are selling it with a promise to buy it back at a later date.  With a short position since you don't actually own the item you are selling, some collateral is necessary to ensure you make good on your promise to cover at a later date.

In this case the collateral would be BTSX.  So in shorting bitUSD, the system will hold some of your BTSX as collateral until you cover.

If you are shorting bitUSD you are betting that the price of bitUSD relative to BTSX will go down.  If it does go down and you cover, by buying back the bitUSD you sold in your short.  You will have made a profit by receiving more BTSX. (the difference between your sell and your buy)

if you sold at 1BTSX per bitUSD and you bought back(covered) at 1.10BTSX per bitUSD you would make the difference as profit (0.10BTSX) (This example show BTSX rising relative to bitUSD or bitUSD falling relative to BTSX. which is what you want if your shorting bitUSD)

So, in a way, you have used BTSX to earn more BTSX by shorting and then later covering at a lower price.  Keep in mind that if the price goes against you, you may be forced to cover at a HIGHER price and lose some or all of you collateral.


Offline Empirical1

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Re: bitUSD price
« Reply #11 on: August 24, 2014, 10:30:09 PM »
I think lots of people will be willing to short BitUSD, not a lot willing to go long at the start.

Might make BitUSD price trade too far below peg. But this will hurt BTSX price causing the situation to correct itself...

Seems like it may need interest rates if you really want to keep it at 1-1. Because a short may be willing to short BitUSD and pay X% interest to entice a long to trade.
« Last Edit: August 24, 2014, 10:34:37 PM by Empirical1 »

Offline mf-tzo

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Re: bitUSD price
« Reply #12 on: August 24, 2014, 10:41:25 PM »
Quote
I think lots of people will be willing to short BitUSD, not a lot willing to go long at the start.

Might make BitUSD price trade too far below peg. But this will hurt BTSX price causing the situation to correct itself...

Seems like it may need interest rates if you really want to keep it at 1-1. Because a short may be willing to short BitUSD and pay X% interest to entice a long to trade.

You lost me here...why this will hurt BTSX price? If a lot of people go short bitusd, wouldn't bitusd fall relatively to BTSX price. Therefore BTSX will rise and will be worth more bitsud..

 

Offline Empirical1

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Re: bitUSD price
« Reply #13 on: August 25, 2014, 12:18:17 AM »
Quote
I think lots of people will be willing to short BitUSD, not a lot willing to go long at the start.

Might make BitUSD price trade too far below peg. But this will hurt BTSX price causing the situation to correct itself...

Seems like it may need interest rates if you really want to keep it at 1-1. Because a short may be willing to short BitUSD and pay X% interest to entice a long to trade.

You lost me here...why this will hurt BTSX price? If a lot of people go short bitusd, wouldn't bitusd fall relatively to BTSX price. Therefore BTSX will rise and will be worth more bitsud..

I think a lot of people are hoping BitUSD may track USD fairly close to 1-1 most of the time.

However because people are so bullish on BTSX and shorting BTSX lets you take a leveraged position on BTSX. BTSX bulls may be willing to short still at $0.70, this trading range will be so far from the peg that it could damage the credibility of the peg. This could make people sell BTSX. This will mean less BTSX bulls willing to short below the peg and the situation will correct itself.

I don't mind a BitUSD like that but it might not appeal as much to retailers and savers.

It seems to make it stable you should introduce free market interest rates.
Then you still short 1-1 but when most people are bulls like now you will pay a higher interest rate to short BitUSD as opposed to shorting very far below the peg.

Offline toast

Re: bitUSD price
« Reply #14 on: August 25, 2014, 12:20:25 AM »
If any motherfucker dares to short at $0.7 I will eat his collateral like a mama bear eats baby bear hunters
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