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Offline cryptosile

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2 new video's on bitAssets and shorts
« on: December 24, 2014, 02:22:30 AM »

I just published two new videos around bitAssets and how they work.  The first video is a whiteboard where I talk about shorting and the mechanics behind everything.  The second video I run through the process of shorting an asset using the bitshares client.

https://www.everydaycrypto.com/

enjoy!

Offline Empirical1.1

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Re: 2 new video's on bitAssets and shorts
« Reply #1 on: December 24, 2014, 03:12:24 AM »
 +5% Great

Offline bytemaster

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 onceuponatime

Re: 2 new video's on bitAssets and shorts
« Reply #3 on: December 24, 2014, 04:27:57 AM »
I just published two new videos around bitAssets and how they work.  The first video is a whiteboard where I talk about shorting and the mechanics behind everything.  The second video I run through the process of shorting an asset using the bitshares client.

https://www.everydaycrypto.com/

enjoy!

Thank you for your efforts! One small criticism: your writing on the whiteboard needs to be BIGGER to be readable by the viewer.

Offline arhag

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Re: 2 new video's on bitAssets and shorts
« Reply #4 on: December 24, 2014, 05:36:20 AM »
http://bytemaster.bitshares.org/update/2014/12/23/How-to-Short-and-Cover-a-BitAsset/

Bytemaster, I noticed you have said this "Minimal Margin is 2x the value of the BitAsset created" or something like it in other places in the forum. But that does not appear to be correct with the current code.

The video itself shows this. The price feed during the video was 18,934 BTS/BitBTC. He shorted 4 BTS worth of BitBTC into existence using 8 BTS (2x) as collateral. At this price feed this corresponds to 0.00021126 BitBTC.

So, at this point there is the 12 BTS (3x) held as collateral in the short position covering the 0.00021126 BitBTC debt. At the price feed, the 12 BTS collateral is worth 0.00063378 BitBTC (300% of the debt owed). The video clearly shows the client saying that the call price for the short position is 37,879 BTS/BitBTC. At that price, the 12 BTS collateral would be worth 0.00031680 BitBTC (150% of the debt owed, not 200%).

What you are claiming doesn't appear to be consistent with what is actually implemented in the client. I remember this caused huge confusion in this thread. Can you please make sure your explanation of the margin call limits is consistent with the code?

Personally, I prefer the the 2x limit (rather than the current 1.5x limit) as I explained here. The problem is that is not what is currently implemented in the code.
« Last Edit: December 24, 2014, 05:41:50 AM by arhag »

Offline cryptosile

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Re: 2 new video's on bitAssets and shorts
« Reply #5 on: December 24, 2014, 05:35:17 PM »
See this discussion:

https://bitsharestalk.org/index.php?topic=12442.0

It was changed from 2x -> 3x backed.

Offline arhag

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Re: 2 new video's on bitAssets and shorts
« Reply #6 on: December 24, 2014, 06:06:52 PM »
See this discussion:

https://bitsharestalk.org/index.php?topic=12442.0

It was changed from 2x -> 3x backed.

This initial collateral level doesn't even matter. What is important is the margin call limit. The only requirement at the blockchain level on initial collateral should be enough to be above the margin call limit. Then the user (via the client) can choose what initial collateral they want above that limit.

From a black swan prevention perspective, we care what the margin call limit is. Right now it is at 150%, which means theoretically, a short can let the value of the collateral drop to right above 150%, then a flash crash of 33% can make the short under-collateralized. What we should do is put that limit at 200% like bytemaster claims it is at. Then a short position right above the 200% limit would have to experience a flash crash of more than 50% to become under-collateralized.

Now obviously with my proposed changes, people won't create a new short position with a 201% collateral. That would be stupid. Even a tiny drop in the price of BTS would cause a margin call and they would have to pay a 5% penalty. So people would naturally put a buffer to protect them from some significant drop in prices from the price at which they entered the short position. The client could by default put the initial collateral at 300% like it is now, but the blockchain should accepted anything as low as 200% (the new margin call limit).

Offline cryptosile

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Re: 2 new video's on bitAssets and shorts
« Reply #7 on: December 24, 2014, 06:23:09 PM »
http://bytemaster.bitshares.org/update/2014/12/23/How-to-Short-and-Cover-a-BitAsset/

Thank you for blog post!

There is definitely confusion around this topic so I want to walk through the first two of your clarifications:


Quote
1. Initial Margin is 3x the value of the BitAsset created
Here margin is used as in margin = collateral,  3x Collateral.  Check. no problems here.

Quote
2. Minimal Margin is 2x the value of the BitAsset created

When you used the word value I first read it as:
Collateral = 3 * short_price * short_qty   (good)
Margin call if  Collateral / price < 2 * short_qty , which would be, call_price = 1.5x * short_price (this is wrong)

Your language is correct if you read it as:
collateral = 3 * short_price * short_qty .
call price = 2 *short_price.  ( Margin call if  Collateral / price < 1.5x * short_qty)  ( this is correct)


However, I think the language could be improved a bit to clearly indicate what the word "margin" is referring to, specifically the collateral or the price.

If other people read it the way I read I think the minimum value is 1.5x the value.  Initially the collateral represents 300% the asset value, when that backing collateral drops to 150% of the asset value it will be a margin call.  This is the most natural way to explain it as it compares directly to fractional reserve banking which has 5% backing or something like that.

On the other hand, i've been looking at this so long I may be going cross eyed....  %-)






Offline cryptosile

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Re: 2 new video's on bitAssets and shorts
« Reply #8 on: December 24, 2014, 06:36:45 PM »
What we should do is put that limit at 200% like bytemaster claims it is at. 

I'm not sure he's claiming that, it may just be a misunderstanding in terminology as I am assuming in the above post.  Because as you say the code is currently written to allow 151% backing based on (collateral/bitUSD).  What is so confusing is the same numbers pop up depending on which value your are referring to, 2x , 150% , etc.

I updated my other post to clarify a little further around those terms:

Old Way  2x Collateral     
Collateral   100 BTS   
Collateral %   200%   
Actual Call Price   75 BTS   
Actual Min Collateral    % 133   (or 75% , 1.33*value = collateral, or .75* collateral = value , same thing)
150% of orignal price   75 BTS   
%75 of Collarteral   75 BTS   
Collateral drops to 150% of short requirement a.k.a requires 66% of collateral to cover   67%   (Wrong)
     
New Way 3x Collateral     
Collateral   150 BTS   
Collateral %   300%   
Actual Call Price   100 BTS   
Actual Min Collateral   150%   (or 66% , 1.5*value = collateral, or .66 * collateral = value , same thing)
150% of orignal price   75 BTS   (Wrong)
%75 of Collarteral   75 BTS   (Wrong)
Collateral drops to 150% of short requirement a.k.a requires 66% of collateral to cover   100 BTS 

Offline Empirical1.1

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Re: 2 new video's on bitAssets and shorts
« Reply #9 on: December 24, 2014, 07:42:15 PM »
Even though I use the client semi-often, this video really reminded me how awesome BitAssets are.
The speed and fluency with which you can trade on a decentralised blockchain from an account you can set up with so little hassle is just an incredible achievement. It's really the best thing since sliced bread.

Offline cryptosile

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Re: 2 new video's on bitAssets and shorts
« Reply #10 on: December 24, 2014, 11:01:26 PM »
It's one of the few coins where you can do real time demonstrations because the confirmations and block times are so quick.

Offline santaclause102

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Re: 2 new video's on bitAssets and shorts
« Reply #11 on: December 24, 2014, 11:44:53 PM »
I just published two new videos around bitAssets and how they work.  The first video is a whiteboard where I talk about shorting and the mechanics behind everything.  The second video I run through the process of shorting an asset using the bitshares client.

https://www.everydaycrypto.com/

enjoy!

I like your videos! +5%

Offline gamey

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Re: 2 new video's on bitAssets and shorts
« Reply #12 on: December 25, 2014, 09:20:16 AM »
Yes this was a great video.  I have been wanting to see something like this for months.  +5% repeatedly.

The market mechanics are so confusing to n00bs and likely even to those who have day trading experience. 

Keep up the good work and get a twitter button!
I speak for myself and only myself.

Offline svk

Re: 2 new video's on bitAssets and shorts
« Reply #13 on: December 31, 2014, 09:12:59 AM »
I just published two new videos around bitAssets and how they work.  The first video is a whiteboard where I talk about shorting and the mechanics behind everything.  The second video I run through the process of shorting an asset using the bitshares client.

https://www.everydaycrypto.com/

enjoy!

Finally got around to watching this, really good job, thanks! My apologies for the broken legends on bitsharesblocks, it's since been fixed ;)

I'd love to see another video doing a walkthrough of the bitshares wallet: how to receive money (with and without a registered account), how to register an account, and especially how to vote! The vote part could include some info on how to research delegates as well.

Anyway good job, keep it up!
Worker: dev.bitsharesblocks

Offline cryptosile

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Re: 2 new video's on bitAssets and shorts
« Reply #14 on: January 01, 2015, 01:57:07 AM »
I've actually got a wallet walk through I did about 4 months ago.   But with all the changes recently it could use an update.   

 

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