September 4th 2013 edit: Pursuing this particular asset has been cancelled. The algorithm was used instead on cryptocurrency stock exchanges and was able to make a profit of several hundred percent in three months. Future offerings will be structured with more regulatory scrutiny in mind, as well as the improvements in the bitcoin securities community.



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This is an IPO of an exchange traded fund (ETF). The underlying asset is the profit of a high frequency trading (HFT) algorithm created by State Trading Society (STS Ltd.)

STS Ltd. engages in algorithmic trading and derivatives research. The company’s trading algorithms currently run on electronic exchanges such as Nasdaq, BATS, EDGE, NYSE, and BTC-E.

The cryptocurrency market is engaging because there are no settlement times for trades and no limitation on market trading hours, allowing for a greater frequency of trades to occur as liquidity improves. This algorithm will be trading on usd and cryptocurrency markets.

Net Asset Value (NAV) of a share will be posted weekly priced in Bitcoin and in shorter intervals as the market grows.

Holders of interests in the ETF will benefit from the appreciation of the NAV and special dividends.

Share capital is used directly for the trading algorithm. This is a computerized operation whose funding (for this ETF) will be from the ground up, much like how the mining companies operate. STS Ltd. will cover the IPO listing fees.

Specifications:
Exchange for listing: BTCT.CO BTC Trading Corp.
Shares: 100,000
Price: .20 bitcoins, but tbd by free market
Dividends: Quarterly or special dividends, TBD

Anybody that has ever lost money trading should understand the implications of this fund and why it would be good for them.

Transferring ownership of shares can continue even if the exchange goes down.

If there are any questions, skepticism or concerns, please PM me. This thread will be used to judge sentiment and post NAV.

Risk Disclosure and how this fund mitigates them:
Currency Risk - The algorithm will be trading in bitcoin markets as well as usd markets, and at limited times also be holding other cryptocurrencies while engaging in pair trades. The main volatility of these holdings will come from the bitcoin to usd exchange price, as there will be significant holdings priced in usd on usd exchanges. The fund will seek to hedge bitcoin volatility in relation to the USD holdings with forward delivery.

Liquidity Risk - The amount of liquidity in cryptocurrency exchanges can be limited, especially in alternate currencies. The algorithm mitigates this by calculating optimal position sizes which are a fraction of the portfolio. The algorithm reads the order books and dynamically creates orders.

Software Risk - Exchanges can change their API. Bitcoin and cryptocurrency exchanges are not as established as other capital markets.


Regulatory Disclosure:
This security is not marketed to US citizens. If only there was some sort of foreign bitcoin stock exchange where people could purchase shares with nothing but an email and bitcoin address.  


TO DO:
- Historical performance, case study

issuing securities in the united states, that is

No,

securities in the term of ownership of a company


nothing innovative here, I will tell all about my company when I can post in the securities forum

Mt. Gox is currently incapable of running a 24/7 exchange so they should just establish market hours and deal with system maintenance outside of market hours, like established exchanges do

difficulty will not always necessarily increase

its time out, indiscriminate

anyone "mining" is confirming transactions


mining is a misnomer

hey guys, when I get out of this forum I will be in the securities market forum, see you there