It's a bit problematic that shorts aren't punished for expiring by getting forced to cover at a higher price,
Why? The point of expiration is to provide BitAsset holders with a guarantee that they can exit into BTS within 30 days at or above the price feed (in BitAsset/BTS). That is still true. They will eventually be able to put a relative BitUSD sell order at 0% offset from the price feed and then just wait. We can guarantee that their order will be matched within 30 days. There is no need to force expired orders to buy 10% below the price feed, unless of course their collateral ratio drops below 200% in which case they should then be margin called and buy any BitUSD sells at a price that is above the price 10% below the price feed (BTW, this is probably a good time to bring
this comment to the attention of the developers).
I'd assumed that would be the case to avoid situations like what we're currently seeing.
As far as I can tell, the bug has to do with the expired short cover orders (at the price feed) not matching with the short sell orders (at the price feed). If that is the case, then that would indeed be a bug. But I have already offered the shorts frustrated by this bug a
solution until a proper fix is ready.
But what I really don't understand is why my short at 115 BTS per bitUSD doesn't even show up on the orderbook. I'm really hoping this is a bug and not intentional.
Hmm.. That sounds like a bug to me.
If we're not able to short bitassets at above the pricefeed (bitassets priced in BTS, so above the pricefeed == bitasset overvalued) then increased demand for bitassets will not result in increased demand for bitshares, because you will not be able to short into buy orders above the feed and thus can't profit from increasing bitasset supply by locking up BTS.
There are good reasons why the price feed was first introduced. We don't want the short market to drive the growth of BTS priced in the underlying asset of the BitAsset, that should be done by the market between actual BitUSD holders and BTS (or actual USD holders and BTS on outside exchanges). Removing the limitation could instead break the peg and drive the value of the BitAsset to zero. Now that particular problem doesn't necessary limit us from changing the short limit to slightly above (in BitAsset/BTS) the price feed, say even 10% above (since if it does not reflect outside reality the price feed won't follow the shorts). But the worry I have with that is that it prevents existing BitAsset holders from having the guarantee to exit into BTS within 30 days by simply offering to sell at the price feed. If the shorts are very eager to short sell the BitAsset, the actual BitAsset holders may be forced to sell their BitAsset at a 10% discount from the peg.
Shorts will be forced to cover 10% above the feed starting 2 hard forks from now. There was a discussion about this a few weeks ago when lots of CNY orders expired
Just to be clear, this is for margin called shorts only right? Expired shorts only buy up BitAsset sell orders down to (in BitAsset/BTS terms) the price feed, but not any lower than that, correct? I am saying this is based on
this comment by bytemaster, and also just what I find to be the reasonable and sensible thing to do to not unfairly punish expired shorts.