Author Topic: How about removing a protection for undercollateralized short positions?  (Read 2663 times)

0 Members and 1 Guest are viewing this topic.

Offline JonnyB

  • Hero Member
  • *****
  • Posts: 636
    • View Profile
    • twitter.com/jonnybitcoin
Just increase the MSSR.

I know you said its a separate issue
I run the @bitshares twitter handle
twitter.com/bitshares

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 4664
    • View Profile
    • Abit's Hive Blog
  • BitShares: abit
  • GitHub: abitmore
according to current rule, the short position is not margin called, instead, it shows a yellow price which is much higher than market price hanging on the order book, but unable to fill. I believe many people have been confused by this. I don't know what's the original intention of this rule, likely a bug..

The person margin called has 24 hours to increase their collateral by design.

docs.bitshares.org/bitshares/user/dex-short.html

Quote
By giving 24 hours shorts have an opportunity to cover prior to any price manipulation by big players.
This is another rule, which is about force settlement.
I was talking about margin calls. You won't have any time if your collateral ratio is too low.
BitShares committee member: abit
BitShares witness: in.abit

Offline crypto4ever

  • Full Member
  • ***
  • Posts: 103
    • View Profile
according to current rule, the short position is not margin called, instead, it shows a yellow price which is much higher than market price hanging on the order book, but unable to fill. I believe many people have been confused by this. I don't know what's the original intention of this rule, likely a bug..

The person margin called has 24 hours to increase their collateral by design.

docs.bitshares.org/bitshares/user/dex-short.html

Quote
By giving 24 hours shorts have an opportunity to cover prior to any price manipulation by big players.


Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 4664
    • View Profile
    • Abit's Hive Blog
  • BitShares: abit
  • GitHub: abitmore
Under current design, there is a way to manipulate the market in order to call the short positions at a higher price. The change will solve this.

I think the most possible issue of the change may bring is when the price feed is too far off, the short positions may be called unexpectedly. However, in this case, for the short positions, it's still better to be called earlier, rather than be called after someone ate up all the asks which will force the call at a much higher price.
BitShares committee member: abit
BitShares witness: in.abit

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 4664
    • View Profile
    • Abit's Hive Blog
  • BitShares: abit
  • GitHub: abitmore
Check https://wallet.bitshares.org/#/market/CNY_BTS for example.



As of writing, there is one bitCNY short position whose collateral ratio is below 175%. However, because there are asks (selling CNY for BTS) with price (x BTS per CNY) lower than the feed price (named "settlement" on the screenshot), according to current rule, the short position is not margin called, instead, it shows a yellow price which is much higher than market price hanging on the order book, but unable to fill. I believe many people have been confused by this. I don't know what's the original intention of this rule, likely a bug.

How about changing the rule to call the position regardless of the asks?

To be clear, there is another MSSR rule which is debatable as well, but in this post I'm not talking about it.
BitShares committee member: abit
BitShares witness: in.abit