Bitcoin Forum

I want a contract where I WILL buy 10,000 LTC at $0.07 on January 1st, 2014.

Any takers?

change *can* to *have to* and they have to deliver. or else no one's giving you a contract

If you want the option to buy, then you'll have to pay for the contract up front.  (Obviously no one would give you an option for free even if they were 99% confident in their side).  If that's indeed what you had in mind, let me know and I'll work out what I think a fair price would be.

Thaddeus

HELLO. what terms do you want smoothie?

Keep up okay?  :D

http://forum.litecoin.net/index.php/topic,1098.msg6058.html#msg6058

http://forum.litecoin.net/index.php/topic,1098.msg6080.html#msg6080

http://forum.litecoin.net/index.php/topic,1098.msg6081.html#msg6081

Contract locked in with 420.

See here: http://forum.litecoin.net/index.php/topic,1098.msg6086.html#msg6086

I will buy 10k LTC from user 420 for $700 on January 1st, 2014.

oh this will be fun.............

wonder why I didn't negotiate a higher price....

@420

http://forum.litecoin.net/index.php/topic,1098.msg6092.html#msg6092

Deal is locked. No changes shall be made unless we both agree.

 ;D ;D ;D Yes this will be fun.

It is too late now to change the price. Thank you for accepting.

Smoothie

Witnessed. Contents of that link at the time of this post are as follows:

Context of the "I accept":


Note that there was an edit to this post one minute before Smoothie acknowledged the deal, so the stipulation "as long as u dont buy a bunch of ltc bringing the price to 0.07 now" is questionable in terms of enforcement. Yes, I know it was a joke, but it was included in the acceptance so I need to acknowledge it anyway, in case it's a problem later.

Quoting as evidence that the 420 here is acknowledging the deal.

Also, as far as a scam investigation, Greedi shall take the lead investigative role here as well. If either side has a complaint, go through him first.


If you would like to appeal any action/decision Greedi makes, you can appeal to me if you would like it to not apply to this forum.

Greedi, if you would like any action to be taken here, please tell me what you would like along with a justification and any evidence you have.

Will PM in a moment thanks :)

The provision does nothing. He has no way of knowing I would purchase or have someone purchase for me "now". But given I have no intentions on driving up the price, the provision is irrelevant.

So I'm to understand that 420 provided an option contract to Smoothie for the right to buy 10k LTC a year from now at $.07/ea, but I see nothing about an option premium?!

I -REALLY- hope that Smoothie had to pay a premium for this "contract" up front. Anyone with even the lightest notion of what options are understands there's a premium collected on such contracts. And to have the currency so near the strike would demand a premium (in my opinion) of at least $.025/LTC paid upfront. $100 profit on $700 in 1 year is horrible. I understand it's a 14% ROI, but 420 should have been paid a premium for assuming the risk of holding LTC for a year in case it becomes another worthless currency. Maybe I missed something, but I don't see a premium for this deal listed anywhere.

Perhaps that is how things should have been done, in the "real world".

The agreement has been made and is locked in with Maged/Greedi as witnesses.

I've done a bitcoin futures contract this same way with Jcpham back in October which was agreed 3.5 months in advance to buy 50 bitcoins at $11.

Well anyone who offers you option contracts without an upfront premium on them is an absolute fool, and I'm saying that as nicely as I can. You are taking no risk and only have 100% upside. Meanwhile, any person offering such a contract would be a fool NOT to buy the LTC now to back up the contract, otherwise they risk losing huge sums if it goes up. But, if they DO buy 10k worth of LTC, then they're sitting on a maximum loss of over $600 right now if the coin goes bust.

It's a stupid trade for uneducated investors. Good job scamming someone in BTC a few months back and now someone in LTC.

I suggest anyone else who sees interest in doing business with this guy takes their time and looks into how options are SUPPOSED to work. The buyer of contracts -always- pays a premium. The seller -always- collects one.

420 has now risked ~$600 to win ~$100 with no premium collected on the agreement. 1 year is a LONG time in the options world. 3 months is usually the longest real options traders are willing to stomach. Such a long dated contract is considered a LEAPS (Long Term Equity AnticiPation Security). These carry hefty premiums due to the huge risk of missing upside potential in stocks.

If I were to have done this trade, I would have suggested modeling it as such:

Give smoothie an option to buy 10K LTC on Jan 1, 2014.
smoothie must pay $.02/LTC contract fee ($200) up front. Payable in BTC/LTC or any fiat currency (seeing as how the trade is more than 180 days out, almost anything could be accepted, such as Paypal, because a chargeback before the window closes for them invalidates the contract).

This makes smoothie's breakeven price $.09/LTC on Jan 1, 2014, but as long as it's above $.07/LTC in 2014, he can still exercise it.
This makes 420's cost basis ~$.04/LTC if he buys them up slowly over time (as 10K LTC under $.07/ea isn't even available on BTC-e right now).

smoothie would then have unlimited upside potential in his trade.
420 would have a maximum loss of $400, and a maximum gain of $300. This is much more fair to the seller, as he's only taking on slightly more risk for slightly less money.

-Moose

Moose,

It isn't a scam if the other party agrees. Maged was the witness to my last deal. No scam was done or made. The agreement, no matter how absurd you think it is, is an agreement. No one was forced into the agreement. If LTC goes down in value by January 1st, 2014 I will pay $700 for 10,000 LTC from user 420.

Thank you for educating us on the process though. I'm sure people will learn a lot from this including myself.

Smoothie

P.S. Easy on the scam accusations brother. No one has been scammed by me. Also keep in mind that this is bitcoin/litecoin there is no regulatory agency or laws. We are going on my word and reputation as well as 420's.

This is great, although it's not that big of a deal overall it should contribute some stability. Well done guys.

I probably should've chosen a different word. I didn't mean "scam" in the sense you were going to run off and not pay in the event LTC drops. I understand what you did with the "WILL", and that's nice and all, but the process is all messed up. I understand you're still paying a premium and will pay no matter what. It seems two parties participated in a system they really didn't understand. A deal's a deal, but hopefully anyone on the seller's side will consider my post as reference to develop an outline.

If nothing else, please consider using this site in the future to develop a deal. http://www.mystockoptions.com/black-scholes.cfm (http://www.mystockoptions.com/black-scholes.cfm)

This is one of the standard models that is used to price options contracts.

As an example, I put the current ask price for LTC in ($.062/LTC) for the stock price. I put in $.07/LTC as the exercise price. The time is 1 year. Being that LTC is so cheap, the annual interest rate column is negligible, so I just entered 5 for this. Since LTC is a less accepted and still extremely volatile currency, I entered an 85% volatility rate because of its ability to swing wildly quickly.

After entering all these numbers and clicking the "Calculate" button, the Black-Scholes Calculator estimates a $0.02/LTC option contract fee. I said $.025 off the top of my head as a guess, though that's also the number I myself would have been comfortable with, and not have required the buyer of the contracts to still purchase if under $.07 at the time.

Hope this helps, and I'm sorry I used the term "scammer".

-Moose

EletricMucus,

This is great that two parties were wanting to do a deal like this and it got done, though it does not provide any additional stability for the currency other than one person showing a vote of confidence.

Now, that's not to say that 420 doesn't believe in LTC, because he's stated many times he does and has become very active in the currency. I feel like his deal was a bit of good will to offer support for LTC, but he's technically in what's called a "short" position. He's long LTC (owning them) but short on them because he sold options against it for a set strike above the current price. This means that between now and 1/1/14, according to the trade, 420 believes LTC will remain weak and under $.07. Now, we know this isn't the case with what he's said before, but this is how the trade itself speaks.

smoothie is obviously very long on the prospects of LTC and plans to cash in handsomely down the road. :p

This deal will not affect the price of LTC directly though no matter what happens. This is essentially a "dark pool" (http://www.investopedia.com/terms/d/dark_pool_liquidity.asp (http://www.investopedia.com/terms/d/dark_pool_liquidity.asp)) trade that will not do anything substantial for the currency.

Apology accepted.

Thanks for the information.

It will be very useful for others and in the future for myself.

Mahalo!

Smoothie

\

Electricmucus is correct in that if more people do futures contracts, trade/invest in LTC securities/create merchant accepting LTC businesses LTC will become more valuable and stable.

thanks

I did agree to all the terms and this should go smooth; although it is quite long for my taste (1 year). I'm highly confident Litecoin will be worth a bit more than 0.07 but either way I wanted and took this deal and documented my own evidence of the terms


+1

This thread and the attention our deal is getting alone is good for LTC...oops did I let the secret out ;)

+1

420, what have we started? lol  ;)

If you'd actually read the OP before posting a bunch of times you'd have noticed this is NOT an options contract.  It's essentially a bet on whether at a specific date the price of LTC will be above/or below a certain value.

There's no option to choose to buy or not.
There's no ability to purchase at point other than the fixed date.

So all your posts about how to calculate option pricing are entirely irrelevant.

It's not a very good deal for 420 given the volatility of LTC, however he can simply buy 10,000LTC right now and lock-in a 10%+ gain in the next year.

Obviously if he has say only 10-20k ltc in 'savings' and he's bullish it would be idiotic to do anything but this.

Deprived, smoothie did not have "WILL" buy in the OP. He did, however, modify that post to say as such. He originally wanted an OPTION to buy them in January, but changed the wording to get 420 to accept. This changed exactly what kind of contract they entered into.

I simply explained a scenario in which both parties could have been much happier, as 420 would have claimed some funds up front in exchange for selling an OPTION to buy the 10k LTC, as smoothie originally wanted, instead of smoothie HAVING to buy them as he is now.

So yes, in the beginning smoothie asked for an OPTION to buy, essentially trading an option tied to a currency. It's not my fault the wording was changed.

-Moose

I honestly can say that what I meant to say was WILL buy. Not CAN buy.

I think I made those changes to the OP before you posted in this thread. So technically you were still referencing the changed OP because from your view it said WILL and not CAN.

I hadn't read the updated OP when I typed my post. I saw it when it was still "can" buy, but I didn't reply until later when I had time. Either way, setting up an options contract as I described it better for both parties involved. It gives the seller a premium for his time that he's comfortable with, and if the LTC doesn't go above $.07, then the buyer is stuck only losing the option premium, rather than being forced to buy $700 worth of LTC that could be worth potentially nothing by then.

I'm not trying to squabble with anyone. I only ever wanted to present how the contracts should have been handled over how they were handled.

Is there any scenario where LTC is gone by then? I'm guessing only if a code vulnerability is found and hacked... otherwise it's always worth SOMETHING

Not gone in the literal sense. Gone in the "abandoned and no longer used" sense.

Well presuming the network still exists and you can send LTC I WILL but 10,000 LTC for $700.

You're going to get your money either way. Just depends on if I can get the LTC. I hardly think LTC will be abandoned to that point where no one is mining it anymore.

It's not an option, its a forward contract.  The purchase is mandatory.  This type of contract, while not as common as an option, is perfectly ordinary and does not always (or usually) carry a premium.

When I typed the response, it was based on smoothie's OP that stated CAN and not WILL. This would make my response correct, as that would be an option.

Figured it is time to give this thread a bump.

Price of LTC at $0.50

This was fulfilled to smoothie's satisfaction. right smooth?

haha seems you lost out hard on this :P

lol can i buy also a contract to buy 1000 BTCs at 4$ for 1rst of Jan 2014? :p :P

How about do that with your FeatherCoins (:

I think you really want my Feathers :p :P

Of course!

Yes. Satisfied customer $1400 for 10,000 LTC the first week in April the deal was finalized.

 ;D ;D ;D


The deal was modified so that I would pay twice the original amount of $700 to close the contract early.

Nice!

The seller was an idiot haha.

I want LTC to go on MT-GOX and then we all have a good fun with this topic

Date Registered:   May 07, 2013, 04:44:55 AM

I remember you giving this deal out way back when 420.

It looks like it kinda bit you in the butt.  :-\

I should have bought a contract with you as well, I am kicking myself right now.  :)

But then I would have felt bad for you to have to sell your Litecoins so cheaply, so I guess it would have been bittersweet.

I hope you are well, haven't seen you around in a while.

Cheers,

Ch

well imagine putting a lot of money into something quite risky, but then imagine having a hedge that someone would buy some of it for something in the future.

I'm not an idiot (response to NWO)

+1 both sides had risk.

Good deal smoothie, good...

Can't blame 420 too, it wasn't really obvious ltc would hit 4.5 or what was the ATH so fast or ever. I'd sell some of my alts for 7 cents a piece right now, you can laugh at me later as much as you want  ;D

we've come so far.

Now other alt's are more than litecoin was just a few months ago

Times have changed. I think in a year things will be much different than now also.

Get ready...