Max Short Holding Period

[tonyk]

I guess I just don't see people "dropping their pants" to unload bitUSD if they know that holding for less than a year will give them face value.  I'm not saying your view doesn't have merit but I think if it's that critical the over-creation of bitUSD probably already happened and now most will be grandfathered anyway - it would be kind of nice to reset the market in the short run.

I didn't make any sense from that comment but then again I am tired so I better go to sleep now..What do you mean "reset the market in the short run"?

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

So if (short_order_opened(time) >= 30 days, close_order());

is a lot of work, but new rules for shorts is not?

Sorry, I didn't mean that it was a lot of work to change the code.  I'm saying it is more work for shorters to have to re-short every 30 days (not more work for programmers)

Back to the main topic, please.
 Disagreeing with innocent enough, easy to implement suggestion, just because it does not come from you was bad enough... let's forget it for now.

So, How/Why the' improved short market' is so great?  - more volume/ bigger collateralization/tighter peg, and or other good arguments of the same ink, please.

How "short lived" the highly collateralized positions are is irrelevant if you always have compete to put up high collateral whenever you re-short.  It may not have made a huge difference overnight because there are still a lot of low collateral positions out there, but if those are forced closed or we started the system with collateral prioritization from the beginning then you would see the difference.

Ok, let assume for now they are highly collateralized (not the main objective of your proposal, (but I agree that finding a solution to increase collateral  it is good) ,btw). How this makes the peg tighter?

[Agent86]

How can you say that prioritizing by collateral won't increase the collateral?  Of course it does and this means that bitUSD will have more collateral securing it which should give bitUSD holders greater confidence.

Sorry, for deleting the rest of your inconsistent statements (if you disagree we can argue on them separately).

Easily so, highly collateralized short lived position do not increase the overall collateralization... by much...

but this is just a tiny bit of my problems with the whole system...

BTW, this is the last time I am proving to you why your system does not work. From now on expect, you to prove why it does!
Nothing personal, I am generally not in the business of proving negative facts! Do you want me to ask the same question I asked the NuBits guy?

How "short lived" the highly collateralized positions are is irrelevant if you always have compete to put up high collateral whenever you re-short.  It may not have made a huge difference overnight because there are still a lot of low collateral positions out there, but if those are forced closed or we started the system with collateral prioritization from the beginning then you would see the difference.

[Agent86]

I guess I just don't see people "dropping their pants" to unload bitUSD if they know that holding for less than a year will give them face value.  I'm not saying your view doesn't have merit but I think if it's that critical the over-creation of bitUSD probably already happened and now most will be grandfathered anyway - it would be kind of nice to reset the market in the short run.

I didn't make any sense from that comment but then again I am tired so I better go to sleep now..What do you mean "reset the market in the short run"?

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

So if (short_order_opened(time) >= 30 days, close_order());

is a lot of work, but new rules for shorts is not?

Sorry, I didn't mean that it was a lot of work to change the code.  I'm saying it is more work for shorters to have to re-short every 30 days (not more work for programmers)

[tonyk]

How can you say that prioritizing by collateral won't increase the collateral?  Of course it does and this means that bitUSD will have more collateral securing it which should give bitUSD holders greater confidence.

Sorry, for deleting the rest of your inconsistent statements (if you disagree we can argue on them separately).

Easily so, highly collateralized short lived position do not increase the overall collateralization... by much...

but this is just a tiny bit of my problems with the whole system...

BTW, this is the last time I am proving to you why your system does not work. From now on expect, you to prove why it does!
Nothing personal, I am generally not in the business of proving negative facts! Do you want me to ask the same question I asked the NuBits guy?

[Agent86]

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

So if (short_order_opened(time) >= 30 days, close_order());

is a lot of work, but new rules for shorts is not?

Why are the new rules for shorts "a lot of work"?

I don't see how they are more work.  As a short, you pay less fees, you can specify your bottom line price, and can now specify collateral (I think most people prefer this over a two step partial cover).

Do not bushtit me... explain how they(the new rules) increase the volume and / or the collateral...
You promised both they do neither, in my view. (and sorry we all know you are the only one here with a full time job)
Sorry for the high burden I put on you by asking.

How can you say that prioritizing by collateral won't increase the collateral?  Of course it does and this means that bitUSD will have more collateral securing it which should give bitUSD holders greater confidence.

I have said before and I think others, that when the market first opened there was almost certainly more bitUSD created then there was a legitimate use for (bitUSD is useful for commerce).  This was because of the lack of restriction on shorting and caused bitUSD to be undervalued.

We haven't done anything specifically to get rid of this abundance, but this abundance is a separate issue from the new shorting rules.  That's why I'm saying forcing people to cover instead of grandfathering them could help "reset" the market to get it back on track more quickly.  But generally I don't think there will be a need to reset the market every 30 days.

I've stated the reason I don't like prioritizing based on fees is it makes the cost of transacting too high and increases the spread. 

Think about it like arbitrage between exchanges... If one exchange was trading at a different price but the cost of transaction/withdrawal fees and moving the money between exchanges was too high you couldn't take advantage of the arbitrage opportunity to even out the price.

[jbutta2k13]

This is a price discovery killer.  Introduce  option contracts and sell time decay if you want expiries.  Value cannot be found if markets are artificially propped.

[tonyk]

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

So if (short_order_opened(time) >= 30 days, close_order());

is a lot of work, but new rules for shorts is not?

Why are the new rules for shorts "a lot of work"?

I don't see how they are more work.  As a short, you pay less fees, you can specify your bottom line price, and can now specify collateral (I think most people prefer this over a two step partial cover).

Do not bushtit me... explain how they(the new rules) increase the volume and / or the collateral...
You promised both they do neither, in my view. (and sorry we all know you are the only one here with a full time job)
Sorry for the high burden I put on you by asking.

[Ggozzo]

Older shorts entered before this hard fork will be grandfathered in with a 1 year deadline.

Imho this is not very fair... I was very bullish before BTSX was even launched, but could not short because of lack of information, instructions, bugs in the GUI etc.. If everything was clear and working properly I would have shorted @ 45 - 65 range instead of buying BTSX in the exchanges..

Now, people holding short positions at these levels will now have the additional opportunity to keep their orders for 1 year, when others who still experience problems shorting will have to re short within 1 month.

On the other hand I am totally on board that there should be 1 month of expiration. But 1 year to keep open positions for the ones that had the technical knowledge and the competitive advantage of shorting which normally should be people bullish with large capital is too much. In the end of the day for all of us in here it was a no brainer that since the client is launched BTSX would skyrocket.. Not much of a risk to take..The risk is higher now, with bitcoin price and all cryptos falling day by day, than 1 month ago. So why not make it max 2-3 months instead of 1 year?

The other question is, what happens if on the specific day that I have to cover my short I am on holidays and I don't have access to cover? How will the system treat my position?

If BTSX is trading at 30btsx/bitUSD and you shorted at 45/1 or 65/1 and you haven't taken a profit, then you have some other things to think about. You have made 25-50% of your possible gains at this point and in order to realize 100% will never be possible because it will never trade at 0btsx/bitUSD.

[Agent86]

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

So if (short_order_opened(time) >= 30 days, close_order());

is a lot of work, but new rules for shorts is not?

Why are the new rules for shorts "a lot of work"?

I don't see how they are more work.  As a short, you pay less fees, you can specify your bottom line price, and can now specify collateral (I think most people prefer this over a two step partial cover).

[tonyk]

I guess I just don't see people "dropping their pants" to unload bitUSD if they know that holding for less than a year will give them face value.  I'm not saying your view doesn't have merit but I think if it's that critical the over-creation of bitUSD probably already happened and now most will be grandfathered anyway - it would be kind of nice to reset the market in the short run.

I didn't make any sense from that comment but then again I am tired so I better go to sleep now..What do you mean "reset the market in the short run"?

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

So if (short_order_opened(time) >= 30 days, close_order());

is a lot of work, but new rules for shorts is not?

[theoretical]

I guess I just don't see people "dropping their pants" to unload bitUSD if they know that holding for less than a year will give them face value.

We want BitUSD to be used for functions other than as a buy-and-hold investment.  A merchant selling goods for BitUSD won't want to wait a year to get the full value of the buyer's payment.  A time frame of a month or less when the system is experiencing unusual economic conditions will still be a PITA for the merchant, but much more tolerable.

I'm not saying your view doesn't have merit but I think if it's that critical the over-creation of bitUSD probably already happened and now most will be grandfathered anyway - it would be kind of nice to reset the market in the short run.

IMHO, re-writing the terms of financial derivative contracts after people have bought them is ethically perilous and will do more damage to our credibility than the alternative.

Providing some sort of demand stimulus for BitUSD would help.  I propose charging new shorts interest, and using that to increase long yields [1].  We can also safely increase yields by changing the yield distribution algorithm [2].

[1] https://bitsharestalk.org/index.php?topic=9520.0

[2] https://bitsharestalk.org/index.php?topic=9072.0

[Agent86]

I guess I just don't see people "dropping their pants" to unload bitUSD if they know that holding for less than a year will give them face value.  I'm not saying your view doesn't have merit but I think if it's that critical the over-creation of bitUSD probably already happened and now most will be grandfathered anyway - it would be kind of nice to reset the market in the short run.

I didn't make any sense from that comment but then again I am tired so I better go to sleep now..What do you mean "reset the market in the short run"?

I'm just describing forced covering as "resetting the market" (all positions are opened new from scratch and excess bitassets are removed from circulation).

My point was that there is a limit to how much people will undervalue their bitassets when they know they just have to wait a bit to get the full value.  Making shorts re-short every month seems like a lot of work to me.

[mf-tzo]

If the price rose, then re-shorting the same number of BitUSD would require more collateral.

E.g. if price is at 30 BTSX / BitUSD today and you short 100 BitUSD.  Then BitUSD rises to 40 tomorrow, then drops to 20 in 6 months.  With one-year expiry, you have 3000 BTSX tied up for 6 months.  With one-month expiry, you have 3000 BTSX tied up for one month, then you have to re-short at 40 which ties up 4000 BTSX for the remaining 5 months (unless you re-short less than 100 BitUSD).

Ok now I follow...I need numerical examples to follow...thanks...

[tonyk]

And so went the fees from the short holding period...

And the only reason I see (and I could ever expect to see  is ) I did not come up with it. +' If you do not get it, I do not have time to explain'


as I said:

"Lord protect me from my friends, I can take care of my enemies"?
- Voltaire

[mf-tzo]

Quote from: mf-tzo on Today at 11:18:59 PM
I think it is very important to have an expiry date of 1 month. This will definitely create confidence for liquidity of bitusd and create buying pressure for bitusd. You can always re short if you want so I don't understand what is the benefit for holding a short position for 1 year (even for the old shorts)...

The theoretical benefit for a short for being able to hold a losing short position is that it is effectively the same as letting you re-short with less than 200% collateral which is higher leverage.

"It's not what the shorts want, but it's what the longs need" - dan

I am not sure I fully understand what you mean Toast but I think that you agree that the short position should not exceed the 1 month.
So since the old shorts are effectively keeping profitable positions open now, why would you want to keep them open for 1 year?

Can't you implement a fork that any losing short positions are allowed for 1 year to be kept open but the ones that are winning need to be covered within 1 month? Would something like this be fair, possible and make sense?

I guess I just don't see people "dropping their pants" to unload bitUSD if they know that holding for less than a year will give them face value.  I'm not saying your view doesn't have merit but I think if it's that critical the over-creation of bitUSD probably already happened and now most will be grandfathered anyway - it would be kind of nice to reset the market in the short run.

I didn't make any sense from that comment but then again I am tired so I better go to sleep now..What do you mean "reset the market in the short run"?