Hello everyone,
The BTWTY market has been growing nicely these last first days of its existence. It still a baby market but I intended to keep it that way for its firsts steps into the world. As soon as I'll feel comfortable enough with the settings, I'll start promoting it in a more intensive and extended way.
With that said, the market just had its first margin called order and that brings an important question. You can see it in the next snapshot:
This brainstorm will probably be useful in the future for other BitShares smartcoins that will trade with an important premium.
The "problem" is the next one. The margin call order is sitting way behind the first buyers. If the market keeps trading BTWTY that high compare to the price feed, this order will never be filled.
In that case, if the price of BTWTY keep growing and BTS remain stable, a black swan event will be triggered at some point. We are still far from this possibility but something has to be done in order to diminish the probability of such happening.
My first reaction was to consider increasing the MSSR. It is at 110% at the moment.
Yvv from this forum share with me the fact that :
"The problem is that when you increase MSSR, you increase a safe collateral ratio too, which is equal to MSSR*MCR. This may fix the margin call problem in short term, but it may have negative impact in long term, because collateral ratio is what determines leverage (lower CR = higher leverage). Higher leverage (lower CR) makes shorting more attractive. This issue needs some good brainstorming before taking any actions."The margin call mechanism is complex and sometimes confusing. I would love to have you opinion on the situation.