I thought shorting was borrowing to sell?
I believe that's backwards
A short position is buying a call and selling a put option.
BUT you just cannot expect the person providing the loan to also offer interest for that privilege…The short is borrowing to sell bitUSD and should be paying interest for the privilege.
I thought shorting was borrowing to sell?
Exactly
Yes, but it is short bitUSD (aka long BTS) so it is the opposite.I believe that's backwards
A short position is buying a call and selling a put option.
A synthetic Short = selling 1 call (ATM) and buying 1 put (ATM).
I thought shorting was borrowing to sell?
OK Variant 2
Hopefully more understandable than var #1
I offer interest to the privilege to win 50% and loose 100%
... hope this helps.
OK Variant 2
Hopefully more understandable than var #1
I offer interest to the privilege to win 50% and loose 100%
... hope this helps.
You are borrowing BTS for leverage *. the scenario for losing is when BTS loses some% . so even if you hadn't made the short. You lose some% and because you decided to take leverage you lose more.
For the privilege of borrowing more BTS for leverage, you pay interest.
If you want more BTS and you don't want to pay interest, Buy more BTS with CASH. If you don't have any more CASH and you want more BTS you can borrow more BTS but you have to pay interest, and risk margin call.
*You are not borrowing BTS, you are lending them!!!!!!!!!!!!!
No. I think you are borrowing bitUSD to sell for BTSThis!
Not really borrowing or lending BTS technically.Technically borrowing USD from the network (when shorting)
No. I think you are borrowing bitUSD to sell for BTSThis!QuoteNot really borrowing or lending BTS technically.Technically borrowing USD from the network (when shorting)
Nobody forces you to pay interest for going short.
Interest is only demanded if there is an oversupply of shorters.
With an undersupply of shorters you can even enter a short position above the peg. Which kind of earns you an instant negative interest. Thereby compensating for the 2x collateral requirement.
Nobody forces you to pay interest for going short.
Interest is only demanded if there is an oversupply of shorters.
With an undersupply of shorters you can even enter a short position above the peg. Which kind of earns you an instant negative interest. Thereby compensating for the 2x collateral requirement.