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General Discussion / Re: plan to raise the bitCNY force settlement offset to 5%
« on: November 14, 2017, 07:05:13 pm »
Hi guys -
New to bitshares but really like it and have been investing for the last month or so. For what it's worth, I don't think the problem is framed correctly:
1) The fairness in the system should go both ways: for those wanting to buy any of the "Bit" assets and the sellers.
2) Not fully familiar with the process of calculating the "settlement price" but it doesn't look to me that the current methodology addresses the issue that bitcrab is raising: technical or fundamental issues in a market will impact a particular financial instrument and current rules become unworkable for the system.
3) What the price feed methodology is trying to find is the right (fair) price. One of my responsibilities in my job is to oversee some FX trading activity and we never find ourselves getting quotes in real time from banks that match perfectly...particularly in volatile markets.
4) Given that, we will always have discrepancies in those feeds and the settlement price methodology can only do so much to reflect the "market price" (which is a moving target and will differ from one area to another, or market to another).
I am sure someone mentioned this idea before but why don't we include an adjustment to the average of the feeds that incorporate volatility of the market? if we calculate standard deviation from current feed prices for CNY, it will be
Average 1.796894286
STDEV 0.050622697
STDEV % of Mean: 2.817%
As a comparison, using the same methodology to BitUSD:
11.83008333
0.194776492
1.646%
Some version of this will reflect dynamically the state of a particular financial instrument without having someone "define" what that % is. It only recognizes that the fair price will fall within a band given we are just taking a snapshot from a relative small sample.
New to bitshares but really like it and have been investing for the last month or so. For what it's worth, I don't think the problem is framed correctly:
1) The fairness in the system should go both ways: for those wanting to buy any of the "Bit" assets and the sellers.
2) Not fully familiar with the process of calculating the "settlement price" but it doesn't look to me that the current methodology addresses the issue that bitcrab is raising: technical or fundamental issues in a market will impact a particular financial instrument and current rules become unworkable for the system.
3) What the price feed methodology is trying to find is the right (fair) price. One of my responsibilities in my job is to oversee some FX trading activity and we never find ourselves getting quotes in real time from banks that match perfectly...particularly in volatile markets.
4) Given that, we will always have discrepancies in those feeds and the settlement price methodology can only do so much to reflect the "market price" (which is a moving target and will differ from one area to another, or market to another).
I am sure someone mentioned this idea before but why don't we include an adjustment to the average of the feeds that incorporate volatility of the market? if we calculate standard deviation from current feed prices for CNY, it will be
Average 1.796894286
STDEV 0.050622697
STDEV % of Mean: 2.817%
As a comparison, using the same methodology to BitUSD:
11.83008333
0.194776492
1.646%
Some version of this will reflect dynamically the state of a particular financial instrument without having someone "define" what that % is. It only recognizes that the fair price will fall within a band given we are just taking a snapshot from a relative small sample.
