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Offline nomoreheroes7

How can we short BitUSD?
« on: September 08, 2014, 01:43:06 AM »

I've been trying to short BitUSD for the past few days now, but I'm finding it impossible to stay above the peg while at the same time attracting bidders. All the asks below me get filled until the peg moves lower, making it very hard to fill a short. I heard mention of being able to short below the peg if you pay some fees, but I'm not seeing any options for this. Am I missing anything obvious?

Offline theoretical

Re: How can we short BitUSD?
« Reply #1 on: September 08, 2014, 02:02:25 AM »

We decided not to let people short new BitUSD into existence when there's too many BitUSD already [1].  The fact that you can't short when BitUSD is trading below the peg is a feature, not a bug.

[1] If BitUSD is trading below the peg, it means BitUSD has experienced inflation -- i.e. there are too many BitUSD.
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Offline nomoreheroes7

Re: How can we short BitUSD?
« Reply #2 on: September 08, 2014, 02:07:40 AM »
Alright, that makes sense. I just wanted to make sure I wasn't missing anything obvious. So it seems for at least the short term future shorts will be hard as heck to get filled, seeing as how the BTSX market looks to be on a nice uptrend lol.

Offline Riverhead

Re: How can we short BitUSD?
« Reply #3 on: September 08, 2014, 02:11:17 AM »
Alright, that makes sense. I just wanted to make sure I wasn't missing anything obvious. So it seems for at least the short term future shorts will be hard as heck to get filled, seeing as how the BTSX market looks to be on a nice uptrend lol.


Hopefully that'll change on Wednesday when bitUSD rewards (interest) goes live.

Offline jsidhu

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Re: How can we short BitUSD?
« Reply #4 on: September 08, 2014, 04:19:34 AM »
Yea I would prefer that people would be able to "short" to hell but would pay thru the teeth via fees which would give the longs a nice breath of fresh air when they review their balance sometime in the future.
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Offline Empirical1.1

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Re: How can we short BitUSD?
« Reply #5 on: September 08, 2014, 05:46:52 PM »
I heard mention of being able to short below the peg if you pay some fees, but I'm not seeing any options for this. Am I missing anything obvious?

Yeah this is what I'm wondering. I mean I understand letting people that already have BitUSD sell it first but I heard we were making shorts compete by how much they were willing to pay at 1-1?

Like now when the median price is moving down it seems that all I have to do is put my short as close to it as possible to be first in line. So it's like fastest person wins not the one willing to pay the most?

It seems like there should be a 'shorting queue' and when you want to short you select '1-1' and select a fee.

So there will be a queue of shorts at 1-1 (Wherever that happens to be at the time) and if there is an opportunity to short the one has selected the highest fee is first in the queue?

Offline bytemaster

Re: How can we short BitUSD?
« Reply #6 on: September 08, 2014, 05:52:31 PM »
Place your short order at the highest ($ per BTSX) or lowest (BTSX per $) you are willing to short at and it will take priority when ever there is someone willing to sell their BTSX for USD at a price that is at or below the median feed.   
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Offline Empirical1.1

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Re: How can we short BitUSD?
« Reply #7 on: September 08, 2014, 08:27:04 PM »
Thanks for the reply, (I've never shorted before) but I'm still not understanding how/if we're maximising earnings from shorts willing to pay a premium for priority to short when there are BitUSD buyers at 1-1 or above?

Place your short order at the... lowest (BTSX per $) you are willing to short at...

For example right now the median price is 26.3 BTSX per $

It only lets me put in my short at 26.3 or 1-1. (Range 26.3778 - 29.3087 BTSX/BitUSD)

Shouldn't I be able to put in my short lower (or offer to pay a higher fee) so if someone does want to buy at 26.3 (1-1 or above) I've paid for the privilege of being first in line to get the trade and the network captures the difference as fees somehow?

Otherwise as the BTSX price rises, the BTSX per $ price and the median will go lower, say to 25 BTSX-1 and it's just the person who's at their computer and puts in their short order at that new lower level (25 vs. my 26.3) that gets priority?

« Last Edit: September 08, 2014, 08:29:25 PM by Empirical1.1 »

Offline bytemaster

Re: How can we short BitUSD?
« Reply #8 on: September 08, 2014, 08:46:48 PM »
When viewing the market as $ per BTSX... the current price is $0.038
You can place a short order at up to $0.042, the short order will only execute against people asking $0.038 or less per BTSX. 

No need to be the "first to submit" unless you are attempting to short at more than $.042...

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Offline starspirit

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Re: How can we short BitUSD?
« Reply #9 on: September 09, 2014, 08:08:36 AM »
This thread raises a more general problem in that bids and asks need to chase the peg level as BTSX price changes. As the OP suggests, this can mean one is pushed out of line when the price moves, and prioritisation for shorts is given to whoever is online when a buyer over the feed price price happens to turn up. Also, because each order cancellation and replacement costs in fees, it is uneconomic to change orders as the price moves (especially if BTSX is rather volatile), meaning that the market is less dynamic and efficient.

So is it theoretically possible to introduce an order type (or market) where the order is relative to the feed price? It seems to me that down the track when people want to buy and sell USD without reference to what BTSX is doing in price, that's how many will want to trade it. I can imagine there might be some challenges with thinking about collateral requirements and the like.


Offline bytemaster

Re: How can we short BitUSD?
« Reply #10 on: September 09, 2014, 09:50:00 PM »
This thread raises a more general problem in that bids and asks need to chase the peg level as BTSX price changes. As the OP suggests, this can mean one is pushed out of line when the price moves, and prioritisation for shorts is given to whoever is online when a buyer over the feed price price happens to turn up. Also, because each order cancellation and replacement costs in fees, it is uneconomic to change orders as the price moves (especially if BTSX is rather volatile), meaning that the market is less dynamic and efficient.

So is it theoretically possible to introduce an order type (or market) where the order is relative to the feed price? It seems to me that down the track when people want to buy and sell USD without reference to what BTSX is doing in price, that's how many will want to trade it. I can imagine there might be some challenges with thinking about collateral requirements and the like.

Yes this kind of order is something we are thinking about.  It would have to use the price feed and the price feed isn't very responsive.  They may not get what they hoped to get.   The way it is setup today means that you pick the highest price you are willing to short at and the market and your priority will change automatically with the price movements.  You must update your valuation when you update the order.

This means placing orders based upon actual "valuations" and not reactionary to other people. 
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.

 

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