instant profits from instant settlement?

[JonnyB]

if you can buy smartcoin cheaper than feed and than setlle for a profit why isn't their a huge buy wall just under the feed price all the time?

Generally with rational market participants you shouldn't be able to buy smartcoins cheaper then the feed.  Anyone selling there is making an error, doesn't know about settlement, are in a hurry,  or they figure the price in 24hrs will move against them so much that it will be cheaper to not use settlement.

You are welcome to maintain a bid just below the feed, you simply risk 24hr price movement and the fee's involved.  As well as the possibility that your bid will never get hit, if market participants are rational and efficient.

This is why we need a function that allows you to set a buy/sell order that moves with the setllement price +/-  a deviation as a percentage.

Eg. buy at settlement feed - 2% 
or
sell at settlement feed + 2%

this would allow joe bloggs to add liquidity to all markets very easily.

[Xeldal]

if you can buy smartcoin cheaper than feed and than setlle for a profit why isn't their a huge buy wall just under the feed price all the time?

Generally with rational market participants you shouldn't be able to buy smartcoins cheaper then the feed.  Anyone selling there is making an error, doesn't know about settlement, are in a hurry,  or they figure the price in 24hrs will move against them so much that it will be cheaper to not use settlement.

You are welcome to maintain a bid just below the feed, you simply risk 24hr price movement and the fee's involved.  As well as the possibility that your bid will never get hit, if market participants are rational and efficient.

[JonnyB]

if you can buy smartcoin cheaper than feed and than setlle for a profit why isn't their a huge buy wall just under the feed price all the time?

[xeroc]

As a side note: my price feed script derives the prices going via 2 markets at most .. then the script takes the MEDIAN of the prices available .. it is NOT designed to be the most recent price bit the most fair price considering multiple markets

[abit]

are you sure the settle price is always the settlement price(feed price)?
if yes, then when one user settle, who is his counterparty?

It should take the highest bids first, down to the feed, and then the least collateralized short.

A side note, if there are bids higher than feed price already, why bitcny holders would use settle instead of sell?
If there are active settle orders already, why place bids higher than feed price?

By the way the fee for placing a settle order is 200BTS.

I would advice add a parameter for settle price rate: settle price = feed price * rate
the rate's range can adjust from 95% to 105%, mostly it should more than 100%

and need another logic to protect shorters, if a shorter's colla rate is more than 200%,  no one can settle from him.

No need to set another parameter, just feed the settlement_price to what it should be, it's designed to should not be equal to (weighted) average exchange price.

bts's price is 0.021CNY/BTS at BTC38
but most witness give a feed price at 0.02 CNY/BTS, so the settle price is 0.02

The reason is the price feed script calculates price of bts/cny not only from btc38/yunbi, but also includes some weight by [average price of bts/btc on poloniex/bitfinex] * [average price of btc/usd on external exchanges(bitstamp and so)] * [usd/cny price from yahoo]. When prices of BTC on USD exchanges are lower than which on CNY exchanges, the bts/cny price feed will be lower than the price on btc38.

what will happen?
people sell BTS at BTC38 at price 0.021, get fiat CNY, then sell fiat CNY to transwiser, get bitCNY, then settle at the wallet, buy back BTS at price 0.02
who gets hurt? the shorters again! why we always hurt the shorters? they provide liquility, but we hurt them again and again

In this case Transwiser should charge more fees while selling bitCNY.
And Transwiser should consider it's collateral level seriously to avoid being forced settled.

[xeroc]

are you sure the settle price is always the settlement price(feed price)?
if yes, then when one user settle, who is his counterparty?

It should take the highest bids first, down to the feed, and then the least collateralized short.

@bytemaster: this is what it should do .. not sure if it is implemented that way or just calles the least collateralized position right away

[Xeldal]

are you sure the settle price is always the settlement price(feed price)?
if yes, then when one user settle, who is his counterparty?

It should take the highest bids first, down to the feed, and then the least collateralized short.

[bitcrab]

are you sure the settle price is always the settlement price(feed price)?
if yes, then when one user settle, who is his counterparty?

[btstip]

Hey Tuck Fheman, here are the results of your tips...

• ebit: has been credited 5 PERCENT

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Source: https://bitsharestalk.org/index.php/topic,20283.msg261270/topicseen.html#msg261270

Created by hybridd

[Tuck Fheman]

You're doing it wrong!

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[Xeldal]

if bitUSD's holder can use settle to protect their profit, I can't find any reason why we need to set SQP to 1100 .

bitUSD holders wouldn't use settlement because they can get a better rate selling bitUSD to the market.  Settlement is only for a condition where noone is willing to sell BTS below the feed.

the reason for SQP (or something like it) is to enforce margin calls without raping the shorts due to poor liquidity.   When a position approaches being undercollateralized, at some point, it *Must find a buyer to protect the system from black swan.   SQP is just how far from the feed we are willing to go in order to find a buyer before its too late.  On any other exchange this number would be infinity% (edit: if the order triggered margin call).  They would sell the asset down to zero, if they had to, to try and prevent undercollateralization.  So 10% is not so unreasonable.  At 1% below the feed, you may never find a buyer.   Thats why I say if you're setting it to 1% you may as well not even enforce margin calls.

and then I thought you got it right at one point in the past.

What buyer? You will not find a buyer for the BTS at 10% discount on the illiquid (the DEX compared to all other markets BTS is trading) market?
And why will that be? Because of the price or because this is thin and illiquid market? So lets screw the shorts by making them pay X % above market rate. Why stop at 10% or 50% percent, lets make 250% percent...and this will be the short path to market liquidity in bitWhatever...for sure.

don't mistake my attempt at an explanation of its intention as support for its design.  I may also not have clearly stated.

I don't think we should have SQP.    I don't think it should ever be more that 10%

I think having it at 10% is ok for now.  As you said, why wouldn't someone take a 10% discount.  Though, I don't think 1%, or  0% is a good idea.  It basically turns off margin calls in a market that typically trades 8% - 10% from the feed.

[ebit]

 

[tonyk]

and do not even get me started on "protecting to 10%"...when they (shorts) cannot buy for less than 10% premium they have to pay!

[tonyk]

if bitUSD's holder can use settle to protect their profit, I can't find any reason why we need to set SQP to 1100 .

bitUSD holders wouldn't use settlement because they can get a better rate selling bitUSD to the market.  Settlement is only for a condition where noone is willing to sell BTS below the feed.

the reason for SQP (or something like it) is to enforce margin calls without raping the shorts due to poor liquidity.   When a position approaches being undercollateralized, at some point, it *Must find a buyer to protect the system from black swan.   SQP is just how far from the feed we are willing to go in order to find a buyer before its too late.  On any other exchange this number would be infinity% (edit: if the order triggered margin call).  They would sell the asset down to zero, if they had to, to try and prevent undercollateralization.  So 10% is not so unreasonable.  At 1% below the feed, you may never find a buyer.   Thats why I say if you're setting it to 1% you may as well not even enforce margin calls.

and then I thought you got it right at one point in the past.

What buyer? You will not find a buyer for the BTS at 10% discount on the illiquid (the DEX compared to all other markets BTS is trading) market?
And why will that be? Because of the price or because this is thin and illiquid market? So lets screw the shorts by making them pay X % above market rate. Why stop at 10% or 50% percent, lets make 250% percent...and this will be the short path to market liquidity in bitWhatever...for sure.

[Xeldal]

if bitUSD's holder can use settle to protect their profit, I can't find any reason why we need to set SQP to 1100 .

bitUSD holders wouldn't use settlement because they can get a better rate selling bitUSD to the market.  Settlement is only for a condition where noone is willing to sell BTS below the feed.

the reason for SQP (or something like it) is to enforce margin calls without raping the shorts due to poor liquidity.   When a position approaches being undercollateralized, at some point, it *Must find a buyer to protect the system from black swan.   SQP is just how far from the feed we are willing to go in order to find a buyer before its too late.  On any other exchange this number would be infinity% (edit: if the order triggered margin call).  They would sell the asset down to zero, if they had to, to try and prevent undercollateralization.  So 10% is not so unreasonable.  At 1% below the feed, you may never find a buyer.   Thats why I say if you're setting it to 1% you may as well not even enforce margin calls.   

[alt]

I would ask all witness adjust SQP to 1001, and set feed price to a high than low, at this time, it's 0.021CNY/BTS.
it's time to protect all shorters!

changing SQP doesn't help at all in this case.  you might as well set it to 0000, if you're advising 1001 or lower. 

the current BTS:CNY market is a perfect example of how little changing SQP is going to effect the price.  SQP is currently 1100 and  CNY:BTS is trading around 0990 - 0995. 

If there are no orders being margin called , like the current situation, SPQ is not even a factor.  If it was, all these buy orders would be sold into down to 10% below settlement price or until the margin order was filled.  SQP doesn't do anything if there are no undercollateralized orders.

yes, change SQP to 1001 is not for this case.
it's for protect shorters and add liquility, talk at another thread
https://bitsharestalk.org/index.php/topic,20201.msg260991.html#msg260991

if bitUSD's holder can use settle to protect their profit, I can't find any reason why we need to set SQP to 1100 .

[Xeldal]

I would ask all witness adjust SQP to 1001, and set feed price to a high than low, at this time, it's 0.021CNY/BTS.
it's time to protect all shorters!

changing SQP doesn't help at all in this case.  you might as well set it to 0000, if you're advising 1001 or lower. 

the current BTS:CNY market is a perfect example of how little changing SQP is going to effect the price.  SQP is currently 1100 and  CNY:BTS is trading around 0990 - 0995. 

If there are no orders being margin called , like the current situation, SPQ is not even a factor.  If it was, all these buy orders would be sold into down to 10% below settlement price or until the margin order was filled.  SQP doesn't do anything if there are no undercollateralized orders.   

[alt]

I would advice add a parameter for settle price rate: settle price = feed price * rate
the rate's range can adjust from 95% to 105%, mostly it should more than 100%

and need another logic to protect shorters, if a shorter's colla rate is more than 200%,  no one can settle from him.

[lzr1900]

finally I know what 'settle' means ......
this is really suck

bts's price is 0.021CNY/BTS at BTC38
but most witness give a feed price at 0.02 CNY/BTS, so the settle price is 0.02

what will happen?
people sell BTS at BTC38 at price 0.021, get fiat CNY, then sell fiat CNY to transwiser, get bitCNY, then settle at the wallet, buy back BTS at price 0.02
who gets hurt? the shorters again! why we always hurt the shorters? they provide liquility, but we hurt them again and again

I would ask all witness adjust SQP to 1001, and set feed price to a high than low, at this time, it's 0.021CNY/BTS.
it's time to protect all shorters!

yes

[alt]

finally I know what 'settle' means ......
this is really suck

bts's price is 0.021CNY/BTS at BTC38
but most witness give a feed price at 0.02 CNY/BTS, so the settle price is 0.02

what will happen?
people sell BTS at BTC38 at price 0.021, get fiat CNY, then sell fiat CNY to transwiser, get bitCNY, then settle at the wallet, buy back BTS at price 0.02
who gets hurt? the shorters again! why we always hurt the shorters? they provide liquility, but we hurt them again and again

I would ask all witness adjust SQP to 1001, and set feed price to a high than low, at this time, it's 0.021CNY/BTS.
it's time to protect all shorters!

[Xeldal]

yes there is, unfortunately polo's withdrawals seem down...as well as their customer support

Yunbi is also having deposit/withdrawal issues. 

[tonyk]

yes there is, unfortunately polo's withdrawals seem down...as well as their customer support

[JonnyB]

well here's a free money opportunity

[JonnyB]

so when you settle does it take the price at the time or the price in 24hrs when it actually settles?

[Xeldal]

Am I right in thinking If I buy smartcoin with bts for less than the settlement price I can then instantly settle it and make a profit?

yes, keeping in mind the fees of course. And the delay, whatever it is.  24 hrs right?

Anyone selling you a smartcoin below the peg has made an error as they could have settled at the feed for more.  It shouldn't happen, but I'm sure its possible with low liquidity.  There is also a fee for using settlement, I'm not sure what it is though.

[JonnyB]

Am I right in thinking If I buy smartcoin with bts for less than the settlement price I can then instantly settle it and make a profit?