Are you considering an investment in MPOE shares/bonds?

March 2012 Results :

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Operational results
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Overall 3`587 contracts, of which +1`893 -100 CALL ; +394 -1`200 PUT.

Received : 2`504.45113888 BTC.

Expended : 1`891.81938897 BTC, of which :
     *owed to customers, 1`770.97441517 BTC
     *capital expenses : 50.84497380 BTC (1`893 BTC + 662.02380952 BTC) × 1.99%
     *advertising expenses : 70 BTC

Third parties covering shorts : +501.84210500 BTC (total 501.84210500 BTC).

Profit : 110.78964491 BTC

*******************
Shareholders table
*******************

Total shares : 1`000`000`000, of which :
     1. 12fmA1LuYpXqGzguWmDV7efRAHwrUcxxy8, 1`100
     2. 1LH8pRGWtgVWAw13Tqc8H3iys4mmKYygB3, 330`214
     3. 142Y7SccDv471NirBJoWpsDo9yLQgd92r5, 22`014
     4. 1CMeG8KzxzYRjRQS7BzfsMbW2b2FPf4RHw, 55`035
     5. 1MqrNNoRrtyJiv5HnBNEG2hb3itae7Pdt8, 165`107
     6. 1BvaoNBkNFkaHLUavJFAXRRrnxjqfdJYW6, 88`057
     7. 1GUpLZyMMBR7hig5zxnzfLabMXGay7JmXp, 55`035
     8. 17W4tjwJwPSJBDAA2uav2xuoj8cAocitxV, 110`071
     9. 1JdSigiyLRXiBingciXegfGWAjdzLW1AAH, 173`362
     10. Mircea Popescu, 999`000`005

Total dividends : 110.78964491 BTC (per 1 mn share block : 0.11078964 BTC).

******************
Bondholders table
******************

Total retained capital : 2`555.02380952 BTC, of which
     1. 1HLWcPokYJixh6BsJH9JWa8MzDaGSLGDds, 100.00000888 BTC @ 1.99%
     2. 1NcrEUkRzqQaAEGabZKPTZhArzhJvYNGWh, 100.00000888 BTC @ 1.99%
     3. 1CkEwsGgZ9saNRmr5FnbtYJjnLBdgGpS7J, 100.00000888 BTC @ 1.99%
     4. 1J9AN7LiDNDUfzAwk8D3uBLT5diWHFFCh5, 1000.00000888 BTC @ 1.99%
     5. 17KZZq1Q8dD3no2×9Ww2XqVVq6aw1JB69Q, 50.00000888 BTC @ 1.99%
     6. 1swAzHw1zTWqoi5184VinvUxLWnBskPVW, 1205.02376512 BTC @ 1.99%

To cover : 0 BTC
Loss per BTC : 0.0

Final bondholder list :

     1. 1HLWcPokYJixh6BsJH9JWa8MzDaGSLGDds, 100.00000888 BTC
     2. 1NcrEUkRzqQaAEGabZKPTZhArzhJvYNGWh, 100.00000888 BTC
     3. 1CkEwsGgZ9saNRmr5FnbtYJjnLBdgGpS7J, 100.00000888 BTC
     4. 1J9AN7LiDNDUfzAwk8D3uBLT5diWHFFCh5, 1000.00000888 BTC
     5. 17KZZq1Q8dD3no2×9Ww2XqVVq6aw1JB69Q, 50.00000888 BTC
     6. 1swAzHw1zTWqoi5184VinvUxLWnBskPVW, 2000.00000888 BTC @ 1.99%
     7. Mircea Popescu (creditor of last resort), 2%

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Miscellaneous
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 4`000`000 shares offered through public subscription through the 6th of April (more info).

I'll sell you my two brown mystery boxes for 10950 dolla. Deal???

That would be correct. This is why we try to offer a guesstimate of next month's needs, as in


Obviously it's not exact, but it should give users at least a broad idea of what is going on.

It's not, it will be known on the end of April. Here's how reserves are calculated (from the 1st post above):


So, to understand this: at the end of today (Friday, March the 30th) all calls sold during the entire month will be added up, then all puts times their strikes added up then divided by the lowest btc price of the month, and the sum of these two is the reserve amount for March.


The latter. A "month" for MPOE starts at the end of the last Friday of one month and ends on the end of the last Friday of the next month.


Actually April has not started yet.


You must have caught the script just as it was updating the holdings. Those are in fact March options, not April. This might be a little confusing, granted, if you just happen to see the list for the first time in the wee hours of the last Friday.

What happened there is this: options can not be traded anymore on the last 24 hours of their lives (so during the last Friday of the month). There is however a slight delay between the moment when the month names are updated (~ a second past midnight) and when the volumes are moved around. Thus there's this (short) interval where you see the March options called April options. They're not.


You are possibly missing this part from the original post:


Now let's go a little through some cases to understand this better.

Month 1. There are no bonds. MPOE sells 500 CALLs, no PUTs.
Month ends. Reserves = 500 BTC. Interest paid = 500 x .02 = 10 BTC.

Month 2. There's one bond, 500 BTC @ 1.5% interest. MPOE sells 500 CALLs, 500 PUTs @ 5.0, lowest BTC/USD of the month is 4.5.
Month ends. Reserves = 500 BTC + 500 * 5 / 4.5 = 1055.55555555 BTC. Interest paid = 1055.55555555 x 0.02 = 21.11111111

Month 3. There's one bond, 5000 BTC @ 1.7% interest. MPOE sells 900 CALLs.
Month ends. Reserves = 900 BTC. Interest paid = 900 x 0.017 = 15.3 BTC.

You can also give a look at February's closing to get maybe a better idea of how all this works in practice.

Don't hesitate to ask if it's still not clear in any points.

 
 I think to some degree you overestimate the importance of your perceptions. I guess time will tell either way.

 
You might be a little... off in your perceptions of what exactly happened there.

So nice you could drop by.

Flat is a bad idea, but warehouse space should be cheaper anyway.

This is a joke at best. MtGox is about as important for bitcoin from this perspective as James Bowman Lindsay was for the electric industry. Ever even heard of him? Didn't think so.

MtGox has the simple choice to obey right now or disappear in a few years at a maximum. The impact of either choice to bitcoin itself is comparable to the impact of the Wright character on Global Warming. He gets agitated often and flails arms a lot but how much heat is that going to generate?

*bows*

I asked since we're doing this and apparently MPOE has traded a total of 17,309 bitcoins in CALL/PUT positions since launch (about the same time as Bitcoinica, maybe a coupla weeks earlier or something like that). So apparently plenty of room to grow

Because a lot of people have asked and keep asking, I'm cutting you a deal. Here's my bitcoin address: 19SuidQS9ZSU59WXyPPDpKJWyBePzxKZY7. Once there's ten bitcoins in there I'm going to post a (somewhat) larger version of either this current avatar or the previous one, whichever you prefer. Make sure you state your preference here.

Have fun now.

You probably need to look into options. Check sig.

I think I'm going to save myself for the First Bitcoin Wahmbulance Center.

THERE IS EXTREME INSTABILITY IN THE WEATHER OF SOME PLACES!!!!
Sometimes volcanoes erupt. I know of a person that was shot in the street.
There was a case of a preacher who was cruising for gay sex.
BE CAUTIOUS!!!

Well, call it the Bitcoin Fire Department then, its exactly equally as good a name.

From the original MPOE opening to the public announcement:

MPOE holds absolutely no capital of its own, being exclusively composed of the algorithm that prices options and other algorithms and general craftiness required for the entire thing to function. During its normal operation, MPOE borrows capital needed for complete coverage of all risks it undertakes (by which we mean an amount of BTC equal to the total number of open CALLs plus a quantity of USD equal to the sum of all puts multiplied by their respective strikes. Based on this reserve, MPOE can never end up unable to deliver BTC it owes, regardless of whether the BTC price reaches infinity or zero).

At that time (February 20th) Mircea Popescu was (by virtue of inertia mostly) the only lender of MPOE, on the basis of the following agreement: for a 2% premium on any capital lent (calculated as above), he'd cover any losses that may arise.

This deal has been since then open to anyone! In order to finance MPOE, interested parties have to send an email which will mandatorily contain: a) the bitcoin address where you will receive your capital back when it's time plus your monthly premium, b) the exact value of your desired premium (a real number higher than 0 and lower than 2), and c) the exact amount you will be investing. After sending the email, send the money over at the usual bitcoin address (1JPvucRfu3ZzEvfBUQTJwsxMrZjeTqD6zR). Make sure that the 6th, 7th and 8th decimals are all 8 (so in order to invest 1000 BTC send 1000.00000888).

At the end of each month, the list of deposited investments will be ordered ascendingly by the premium, and a line drawn under (or through) the offer which fills the capital needs of the respective month. All the people above the line will receive the last accepted premium (a system much like the one used for treasury bonds sales). So as to understand better, an example:

A sends 100 BTC desiring a 1.2% premium,
B sends 1`000 BTC desiring a 1.5 premium,
C sends 500 BTC desiring a 1.65 premium,
D sends 5`000 BTC desiring a 1.9 premium.

Were this to happen in October 2011, when the total financing needs were 1152.17 BTC, the line would be drawn through C, and the month's financiers would be:

A, with 100 BTC at 1.65%,
B, with 1000 BTC at 1.65%, and
C, with 52.17 BTC at 1.65%.

Were the same to happen in December 2011, when the financing needs were 5775.71 BTC, the line would be drawn through D, and the month's financiers would be:

A, with 100 BTC at 1.9%,
B, with 1000 BTC at 1.9%,
C, with 500 BTC at 1.9%, and
D, with 4175.71 BTC at 1.9%.

Obviously, in all cases when the financiers do not cover the month's needs, Mircea Popescu will fill in the remainder at the fixed rate of 2%.

Although the financiers do not receive any part of profits made by MPOE, their financing is not without risk, because their capital will be used to answer any shortfalls, proportionally. Taking as an example again the month of December 2011, when the net results were -112.556858450 BTC, this sum would then have been divided by the total capital (5775.71) resulting in a loss of 1.9487969% (1.9487969 bitcoin cents to the bitcoin). This means that going into January 2012, the capital of each would be as follows:

A holds 98.051203100 BTC desiring a 1.2% premium,
B holds 980.51203100 BTC desiring a 1.5% premium,
C holds 490.256015500 BTC desiring a 1.65% premium,
D holds 4918.623892967 BTC desiring a 1.9% premium.

Thus each financier lost a small amount of BTC; A 0.049 BTC, B 0.49BTC etc. In October, when MPOE made a profit, each financier would have simply received his due premium, without any capital losses.

It is important to bear in mind that any sums sent for participating in financing will only be considered for whole months (so if you send on the 2nd or 20th of March 2012, you will not be eligible to participate in the financing of March; only April and onwards). The owners can request the withdrawal of their investments (by sending an email from the same address as the one that announced their deposit), which will be processed at the end of the month, and only after any relevant losses (if applicable) have been deducted. Investments under 50 BTC are not accepted due to clerical reasons. Any bonds depreciated below this level will be automatically returned to the respective investors.

The list of sums invested and the corresponding premiums will be available on a special page, as public information.

As the last Friday (the 30th) of March draws near, the window to send funds for the month of April narrows. After the 30th your deposits can only be used for May and onwards, so take advantage.

The capital retained from 3rd parties for the month of March is 3350.00005328 BTC from 6 bondholders. Using a best guess estimate the capital retained for April will be in the 3k to 5k BTC range.

The consensus is that there is not, never will be and never could be any "Bitcoin Police" and also that the hicks who think in these terms but aren't self-aware enough of their mental issues to stick with fiat currency only should be ostracised.

 

This is so true it made me cry a little.