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Offline G1ng3rBr34dM4n

So I clicked the "cover" button...
« on: August 26, 2014, 04:08:59 PM »

This may be a dumb question, but I have a feeling that other people are probably in the same boat.

I clicked the green cover button under open orders; result: It appears I now have more btsx..

Questions:
What did I do? (with regards to market mechanics)
Are there any negative effects I should expect in the future?
"Green" button means "press here", right?
What do I need to know about margin orders?

I'm working to further my understanding of margin calls and could use a good overview / ELI5


Offline bitmeat

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Re: So I clicked the "cover" button...
« Reply #1 on: August 26, 2014, 05:07:12 PM »
BUMP.

What does the COVER do? Does it execute at market prices? Or does it cover at the margin?

Can one put a limit cover order?!?

jakub

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Re: So I clicked the "cover" button...
« Reply #2 on: August 26, 2014, 05:11:00 PM »

Offline bytemaster

Re: So I clicked the "cover" button...
« Reply #3 on: August 26, 2014, 05:12:04 PM »
Cover transfers USD from your account to the MARGIN position canceling out some or all of the USD owed.  If the USD owed goes to 0, then the BTSX is transferred back to your account.

No market operations occur during a manual cover.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline bitmeat

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Re: So I clicked the "cover" button...
« Reply #4 on: August 26, 2014, 05:16:35 PM »
Cover transfers USD from your account to the MARGIN position canceling out some or all of the USD owed.  If the USD owed goes to 0, then the BTSX is transferred back to your account.

No market operations occur during a manual cover.

Thank you! That makes sesne. So you manually purchase, then cover it.

I noticed in the UI that after I select an amount to cover it becomes the amount shown in the margin, even though that's not the correct total I have.

Offline theoretical

Re: So I clicked the "cover" button...
« Reply #5 on: August 26, 2014, 05:22:54 PM »

Is there any way to make a market order to cover?  If I'm short BitUSD, there's no economic reason I shouldn't be able to use the collateral to issue a Buy order at any price lower than the margin call (and if the order is filled, the BitUSD cover the position).

And there's an excellent reason to have this functionality:  If someone's entire wallet consists of short positions and they have no BTSX outside of collateral, it allows them to liquidate in an orderly fashion instead of being subjected to a margin call.  Even when not at the keyboard.
BTS- theoretical / PTS- PZxpdC8RqWsdU3pVJeobZY7JFKVPfNpy5z / BTC- 1NfGejohzoVGffAD1CnCRgo9vApjCU2viY / the delegate formerly known as drltc / Nothing said on these forums is intended to be legally binding / All opinions are my own unless otherwise noted / Take action due to my posts at your own risk

Offline bytemaster

Re: So I clicked the "cover" button...
« Reply #6 on: August 26, 2014, 05:27:27 PM »

Is there any way to make a market order to cover?  If I'm short BitUSD, there's no economic reason I shouldn't be able to use the collateral to issue a Buy order at any price lower than the margin call (and if the order is filled, the BitUSD cover the position).

And there's an excellent reason to have this functionality:  If someone's entire wallet consists of short positions and they have no BTSX outside of collateral, it allows them to liquidate in an orderly fashion instead of being subjected to a margin call.  Even when not at the keyboard.

There is a small economic reason.... it means those who are "short" actually hold more BTSX than their position indicates so they can cover at market prices.  We have a way to cover "at market" for a 5% fee... but it isn't available via the RPC calls.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline G1ng3rBr34dM4n

Re: So I clicked the "cover" button...
« Reply #7 on: August 26, 2014, 06:22:19 PM »
Cover transfers USD from your account to the MARGIN position canceling out some or all of the USD owed.  If the USD owed goes to 0, then the BTSX is transferred back to your account.

No market operations occur during a manual cover.

I'm still not quite sure what's going on here, so I'll keep asking questions...

What triggers a cover to pop up in my open order window?  I noticed last night after I bought some bitUSD and held, I never had a cover "opportunity" (is that the correct perspective?) pop up.

...the gears are turning, but I haven't quite connected the dots yet and I'm working to struggle through this before googling for answers.

Offline G1ng3rBr34dM4n

Re: So I clicked the "cover" button...
« Reply #8 on: August 26, 2014, 06:22:37 PM »

Offline bytemaster

Re: So I clicked the "cover" button...
« Reply #9 on: August 26, 2014, 06:29:55 PM »
Cover transfers USD from your account to the MARGIN position canceling out some or all of the USD owed.  If the USD owed goes to 0, then the BTSX is transferred back to your account.

No market operations occur during a manual cover.

I'm still not quite sure what's going on here, so I'll keep asking questions...

What triggers a cover to pop up in my open order window?  I noticed last night after I bought some bitUSD and held, I never had a cover "opportunity" (is that the correct perspective?) pop up.

...the gears are turning, but I haven't quite connected the dots yet and I'm working to struggle through this before googling for answers.

Owning BitUSD has no need to cover... only if you SHORT BitUSD do you have to worry about covering.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline liondani

Re: So I clicked the "cover" button...
« Reply #10 on: August 26, 2014, 06:33:36 PM »
in general when SHORTing
  https://bitshares.OPENLEDGER.info/?r=GREECE  | You are in Control | BUY | SELL | SHORT | SWAP | LOAN | TRADE |  

Offline G1ng3rBr34dM4n

Re: So I clicked the "cover" button...
« Reply #11 on: August 26, 2014, 06:41:04 PM »
Cover transfers USD from your account to the MARGIN position canceling out some or all of the USD owed.  If the USD owed goes to 0, then the BTSX is transferred back to your account.

No market operations occur during a manual cover.

I'm still not quite sure what's going on here, so I'll keep asking questions...

What triggers a cover to pop up in my open order window?  I noticed last night after I bought some bitUSD and held, I never had a cover "opportunity" (is that the correct perspective?) pop up.

...the gears are turning, but I haven't quite connected the dots yet and I'm working to struggle through this before googling for answers.

Owning BitUSD has no need to cover... only if you SHORT BitUSD do you have to worry about covering.

Hmm.  Either I clicked something without knowing I was shorting, or I found a bug.

Let me describe what happened (looking back at my transaction history for reference): 
  • This morning I bought $500 bitUSD as I noticed the price of BTSX going down (price was at 21.998 btsx/bitUSD)
  • I placed a sell order for $500 bitUSD at the price of 25 btsx/bitUSD.
  • I then thought "eh, it probably won't hit 24 btsx so I'll cancel"
  • Meanwhile, a cover popped up under my open orders for $100 bitUSD - I wasn't sure what initiated that.
  • I cancelled the sell order
  • I immediately (within a block confirmation - ish) clicked on cover
  • wam bam, thank you sam - I now had another 4,399.9 btsx

I didn't short anything today.

What happened?!


Offline G1ng3rBr34dM4n

Re: So I clicked the "cover" button...
« Reply #12 on: August 26, 2014, 06:44:36 PM »
Cover transfers USD from your account to the MARGIN position canceling out some or all of the USD owed.  If the USD owed goes to 0, then the BTSX is transferred back to your account.

No market operations occur during a manual cover.

I'm still not quite sure what's going on here, so I'll keep asking questions...

What triggers a cover to pop up in my open order window?  I noticed last night after I bought some bitUSD and held, I never had a cover "opportunity" (is that the correct perspective?) pop up.

...the gears are turning, but I haven't quite connected the dots yet and I'm working to struggle through this before googling for answers.

Owning BitUSD has no need to cover... only if you SHORT BitUSD do you have to worry about covering.

Hmm.  Either I clicked something without knowing I was shorting, or I found a bug.

Let me describe what happened (looking back at my transaction history for reference): 
  • This morning I bought $500 bitUSD as I noticed the price of BTSX going down (price was at 21.998 btsx/bitUSD)
  • I placed a sell order for $500 bitUSD at the price of 25 btsx/bitUSD.
  • I then thought "eh, it probably won't hit 24 btsx so I'll cancel"
  • Meanwhile, a cover popped up under my open orders for $100 bitUSD - I wasn't sure what initiated that.
  • I cancelled the sell order
  • I immediately (within a block confirmation - ish) clicked on cover
  • wam bam, thank you sam - I now had another 4,399.9 btsx

I didn't short anything today.

What happened?!


AHA!  I think I realized what may have happened.  I have 2 computers right now running the same wallet (one at home, one at work).  Last night I opened a short on my home computer (I believe it was for $100 bitUSD at 22btsx/bitUSD... which makes total sense when this would have posted the cover) but the separate clients didn't sync my open orders (are they supposed to?)

Offline bytemaster

Re: So I clicked the "cover" button...
« Reply #13 on: August 26, 2014, 06:53:25 PM »
Separate clients will not sync open orders because they do not know about the keys.   I do not recommend operating the same wallet on two machines. 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline G1ng3rBr34dM4n

Re: So I clicked the "cover" button...
« Reply #14 on: August 26, 2014, 06:56:13 PM »
Separate clients will not sync open orders because they do not know about the keys.   I do not recommend operating the same wallet on two machines.

Noted. Thank you!

 

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