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Offline aaaxn

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Bypassing short restrictions for bitAssets
« on: September 25, 2014, 11:32:54 AM »

BitShares does not allow shorting bitUSD below feed price to prevent driving price from falling below peg. This restriction can be easily bypassed.
You just take two accounts and trade with yourself at valid price. This way you create bitUSD and simultaneously enter short position on second account. Your net position is unchanged, but now you can freely dump bitUSD below peg, because restriction does not apply to selling bitAssets.

Offline testz

Re: Bypassing short restrictions for bitAssets
« Reply #1 on: September 25, 2014, 11:54:48 AM »
BitShares does not allow shorting bitUSD below feed price to prevent driving price from falling below peg. This restriction can be easily bypassed.
You just take two accounts and trade with yourself at valid price. This way you create bitUSD and simultaneously enter short position on second account. Your net position is unchanged, but now you can freely dump bitUSD below peg, because restriction does not apply to selling bitAssets.

Please double check this thread: https://bitsharestalk.org/index.php?topic=3130

Offline aaaxn

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Re: Bypassing short restrictions for bitAssets
« Reply #2 on: September 25, 2014, 12:12:10 PM »
However you end up with lots of BTSX as collateral.
Nevertheless result is that I effectively entered short position below peg, so why bother with shorting restrictions if they can be circumvented? If collateral is the issue then why don't we just demand more collateral for shorts below peg instead of banning them?

Offline Agent86

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Re: Bypassing short restrictions for bitAssets
« Reply #3 on: September 25, 2014, 12:16:19 PM »
BitShares does not allow shorting bitUSD below feed price to prevent driving price from falling below peg. This restriction can be easily bypassed.
You just take two accounts and trade with yourself at valid price. This way you create bitUSD and simultaneously enter short position on second account. Your net position is unchanged, but now you can freely dump bitUSD below peg, because restriction does not apply to selling bitAssets.
You can't "trade with yourself."  It doesn't work that way.  All orders are matched according to specific rules and specific prioritization.  You don't get to decide that your buy order matches with your short order.  Go ahead and try it if the restriction can be "easily bypassed."

Offline Markus

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Re: Bypassing short restrictions for bitAssets
« Reply #4 on: September 25, 2014, 12:17:32 PM »
This is a known feature - you don't even need two accounts :)

You can only create your double-sided position if the market is trading at the peg (i.e. no asks below the short wall) and if you place your short order on top of the wall (offering the highest collateral ratio).

Offline bytemaster

Re: Bypassing short restrictions for bitAssets
« Reply #5 on: September 25, 2014, 12:20:44 PM »
This is a known feature - you don't even need two accounts :)

You can only create your double-sided position if the market is trading at the peg (i.e. no asks below the short wall) and if you place your short order on top of the wall (offering the highest collateral ratio).

Once my bot is in play you will have a very hard time finding the short wall at the top of the order book. 
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 Agent86

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Re: Bypassing short restrictions for bitAssets
« Reply #6 on: September 25, 2014, 12:23:28 PM »
Yes, basically you can match your short order after you have bought up all the bitUSD that people want to sell below the peg price, in which case you have defeated your goal of going short and have certainly not driven the price of bitUSD down.

Offline Markus

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Re: Bypassing short restrictions for bitAssets
« Reply #7 on: September 25, 2014, 12:26:56 PM »
This is a known feature - you don't even need two accounts :)

You can only create your double-sided position if the market is trading at the peg (i.e. no asks below the short wall) and if you place your short order on top of the wall (offering the highest collateral ratio).

Once my bot is in play you will have a very hard time finding the short wall at the top of the order book.

Hiya,

how far is the feature request "posting normal buy/sell orders as percentage of price feed" going?
This would also create some more liquidity from those restricted to manual orders and unable to program their own bots.

Offline bytemaster

Re: Bypassing short restrictions for bitAssets
« Reply #8 on: September 25, 2014, 12:31:36 PM »
This is a known feature - you don't even need two accounts :)

You can only create your double-sided position if the market is trading at the peg (i.e. no asks below the short wall) and if you place your short order on top of the wall (offering the highest collateral ratio).

Once my bot is in play you will have a very hard time finding the short wall at the top of the order book.

Hiya,

how far is the feature request "posting normal buy/sell orders as percentage of price feed" going?
This would also create some more liquidity from those restricted to manual orders and unable to program their own bots.

Such a order type would require significant work and would not be competitive against the automated traders.
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 biophil

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Re: Bypassing short restrictions for bitAssets
« Reply #9 on: September 25, 2014, 12:50:27 PM »
BitShares does not allow shorting bitUSD below feed price to prevent driving price from falling below peg. This restriction can be easily bypassed.
You just take two accounts and trade with yourself at valid price. This way you create bitUSD and simultaneously enter short position on second account. Your net position is unchanged, but now you can freely dump bitUSD below peg, because restriction does not apply to selling bitAssets.

Have you tried this? Try it. Then come back here and tell us how it went.

(Spoiler: it won't work, because you can't buy into a short unless the short is already below all the asks. If the short is below all the asks, then the market price is already at the peg, which  means you won't be able to sell much below it.)

Offline GaltReport

Re: Bypassing short restrictions for bitAssets
« Reply #10 on: September 25, 2014, 01:32:58 PM »
Tried it for fun with small amount.  Didn't work.  Couldn't target MY short with my Bid.

 

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