|
1227
|
Economy / Securities / Re: [ActiveMining] The Official Active Mining Discussion Thread
|
on: September 07, 2013, 11:02:38 PM
|
The quote is correct and I am correct: "arbitrage /ˈɑrbɨtrɑːʒ/ is the practice of taking advantage of a price difference between two or more markets" - that is exactly happening. You are trying to redefine the word. I won't draw this out any longer. If you think that taking advantage of a price difference between BF and BTCT isn't arbitrage, reread the definition given. It will sink it.
Cheers. [/quote] You aren't. The advantage comes in to play buy purchasing in one and selling in the other. what advantage is there to buying more shares but each share is worth less and not being able to take advantage of the increased price at the other exchange? You have to take advantage of a price difference in two or more markets, but in what you are doing you don't even involve the other market, you just buy in one market and the other isn't involved. BF and BTCT are completely isolated as far as markets go. From Investopedia: Definition of 'Arbitrage' The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time. ar·bi·trage (ärb-träzh) n. The purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy. intr.v. ar·bi·traged, ar·bi·trag·ing, ar·bi·trag·es To be involved in arbitrage. [Middle English, arbitration, from Old French, from arbitrer, to judge, from Latin arbitrr, to give judgment; see arbitrate.] arbitrage [ˈɑːbɪˌtrɑːʒ ˈɑːbɪtrɪdʒ] n (Economics, Accounting & Finance / Banking & Finance) Finance a. the purchase of currencies, securities, or commodities in one market for immediate resale in others in order to profit from unequal prices b. (as modifier) arbitrage operations [from French, from arbitrer to arbitrate] arbitrageur [ˌɑːbɪtræˈʒɜː] n ar•bi•trage (ˈɑr bɪˌtrɑʒ) n., v. -traged, -trag•ing. n. 1. the simultaneous sale of a security or commodity in different markets to profit from unequal prices. v.i. 2. to engage in arbitrage. [1470–80; < Middle French, <arbitr(er) to arbitrate, regulate (< Latin arbitrārī; see arbitrate)] arbitragethe business of buying and selling securities, curreneies, and commodities on an international scale so as to take advantage of differences in rates of exchange and prices. — arbitrager, arbitrageur, n. See also: Money No one claims the definition you do. You are taking the wikipedia statement out of context and making up your own definition. |
|
|
|
|
1228
|
Economy / Securities / Re: [LABCOIN] IPO [BTCT.CO] - Details/FAQ and Discussion (ASIC dev/sales/mining)
|
on: September 07, 2013, 10:22:34 PM
|
I wouldn't be too sure. It's entiely possible that the price will not shoot up as everyone expects.
Just look at ActM as a case in point as has already been mentioned.
Well, ActM still did shoot up, I mean, look at the graph. Now, I think the reason ActM didn't stay at a higher price is most likely because there still isn't anything tangible. The eASIC announcement is great news, to be sure, but there's still a lot of uncertainty (although admittedly that's decreasing) If Labcoin hit their deadline, not only will a lot of uncertainty be removed, but now you're talking about having tangible, hashing hardware. That's likely enough to keep the price afloat. If it is about uncertainty then the eASIC deal should have resolved at least SOME of it. It did nothing. |
|
|
|
|
1229
|
Economy / Securities / Re: [LABCOIN] IPO [BTCT.CO] - Details/FAQ and Discussion (ASIC dev/sales/mining)
|
on: September 07, 2013, 10:19:46 PM
|
What exactly do you disagree with? Thanks.
The statement that good news will lower the price. Also with the necessity of your presence in this thread. I wouldn't be too sure. It's entiely possible that the price will not shoot up as everyone expects. Just look at ActM as a case in point as has already been mentioned. The ActM news was pretty solid news too. It confirmed they had a deal with a top ASIC company and that it wasn't a scam, yet the price went no where. Its the same reason as I mentioned before... there are big sellers who are 'absorbing' all the momentum of the stocks through huge sell-offs. There eventually won't be any money left to buy in to drive the price up because they all got burned. Its almost like getting other people to fund your mining rigs but giving them nothing in return (some people do but no where near to the amount of people who threw-in). They will drive the price up later when they have collected the majority of the dividends and then sell-off. |
|
|
|
|
1230
|
Economy / Securities / Re: [ActiveMining] The Official Active Mining Discussion Thread
|
on: September 07, 2013, 09:42:01 PM
|
Allow inter-exchange share transfers -> BTCT and BF. What argument is there against this?
Will this ever be possible?? Im arbing all my shares and picking up a few extra thousand for free How? Sell 1000 Shares on BTCT. Buy 1300 Shares on Bitfunder.  . Arbitrage would be buying 1300 shares on BitFunder at say .0025 and selling them on BTCT for .003. Then sending the bitcoins you earned from selling on BTCT back to Bitfunder to buy 1600 shares at .0025 and then selling those shares on BTCT again. You do this until the price difference no longer allows a profit. Arbitrage is not simply the act of buying more shares on one exchange than you had on another. You are missing an entire step in the process, i.e., the transfer of the cheaper "good" over to the exchange which is paying more to make the sale. "In economics and finance, arbitrage /ˈɑrbɨtrɑːʒ/ is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit at zero cost. For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high." There is no official mechanism for arbitrage so what people are calling arbitrage in the Bitcoin ecosystem is as close as we currently can get to what fiat institutions have. Further, the only inaccuracy I can see in calling what is described here arbitrage is that it is not instant or guaranteed. It was highly unlikely that the 35% spread yesterday would close before my coin transferred, though. All this to say that arbitrage does not need to be cyclical to be called "arbitrage". It can be one trade from one exchange to the other that nets you a return due to the price spread. TL;DR This IS arbitrage. The definition you quoted is correct, your statements are incorrect. The exchange between the markets needs to take place. There is no way to guarantee that the price on each exchange will at some point be equivalent because they are isolated markets (there is no way to transfer goods from one to the other), thus there is no way to know that purchasing more shares in one is better than purchasing less in the other. Arbitrage initially existed between MtGox and BTC-e, but no longer since BitInstant is down and all the withdrawal problems at MtGox. You can occasionally do arbitrage between BTC-e and Vircurex and that other little exchange. |
|
|
|
|
1231
|
Economy / Securities / Re: [LABCOIN] IPO [BTCT.CO] - Details/FAQ and Discussion (ASIC dev/sales/mining)
|
on: September 07, 2013, 09:20:00 PM
|
|
It seems to be the case that everyone just sells-off after 20-30% gains with these announcements. This has the effect of absorbing all the incoming funds rewarding them with nothing. In other words, those who are selling-off and rebuying low are just collecting shares while keeping the price per share low, and keeping other/new investors out of any potential share holdings(future dividends). Its a good strategy if the plan is to make the money from the dividends rather than the increase of the stock price.
|
|
|
|
|
1232
|
Economy / Securities / Re: [LABCOIN] IPO [BTCT.CO] - Details/FAQ and Discussion (ASIC dev/sales/mining)
|
on: September 07, 2013, 07:42:23 PM
|
What sucks is that we have no idea what to expect with the price... if the past is any guide, it won't go above .004. All the previous jumps on news has conditioned us to sell just below .004. But maybe this time we do that and miss out on huge profit.
It depends on the news. If the news is appropriate proof like that we see hashing occuring, and you think the price will stay below 0.004, you will get burned hard. I don't know. Every step along the way everyone wanted news, that news came and then everyone was like "oh, that news isn't good enough, that is why the price didn't go above .004". What is proof of hashing? Is it a screenshot of CGMiner? Is it an address we can watch accumulating Bitcoins along with CGMiner? |
|
|
|
|
1234
|
Economy / Securities / Re: [ActiveMining] The Official Active Mining Discussion Thread
|
on: September 07, 2013, 07:06:13 PM
|
Allow inter-exchange share transfers -> BTCT and BF. What argument is there against this?
Will this ever be possible?? Im arbing all my shares and picking up a few extra thousand for free How? Sell 1000 Shares on BTCT. Buy 1300 Shares on Bitfunder. . Arbitrage would be buying 1300 shares on BitFunder at say .0025 and selling them on BTCT for .003. Then sending the bitcoins you earned from selling on BTCT back to Bitfunder to buy 1600 shares at .0025 and then selling those shares on BTCT again. You do this until the price difference no longer allows a profit. Arbitrage is not simply the act of buying more shares on one exchange than you had on another. You are missing an entire step in the process, i.e., the transfer of the cheaper "good" over to the exchange which is paying more to make the sale. |
|
|
|
|
1237
|
Economy / Securities / Re: [ActiveMining] The Official Active Mining Discussion Thread
|
on: September 07, 2013, 02:39:16 AM
|
Wouldn't arbitrage in the long run bring the prices to an equilibrium anyways? (Provided the ease of movement is the same with both securities.)
If it was possible to easily move shares from one exchange to another, then the equilibrium would be reached very quickly.
It really depends on ease of movement, a quick instant transfer would match both prices exactly. A slower movement like having to wait 6 hours would mean the prices would still fluctuate a little. There are other factors such as fees and exchange "features" which would make some difference as well. |
|
|
|
|
1238
|
Economy / Securities / Re: [ActiveMining] The Official Active Mining Discussion Thread
|
on: September 07, 2013, 12:42:16 AM
|
Allow inter-exchange share transfers -> BTCT and BF. What argument is there against this?
lazyness on the part of burnside and whoever runs bitfunder (I think i've heard the name Ukyo(?) or something?) Keep in mind in order to do it they have to come up with an absolutely fool-proof security system with digital signatures, etc, otherwise all kinds of shenanigans could be played. Why do you assume it should be the exchanges who create arbitrage mechanisms? They are in competition with each other, not to mention that very few related securities are actually run by the same entity on both exchanges. In this case, the issuer on Bitfunder is the same as the pass through operator on BTCT, so it should be up to Ken to create this tool should he wish to help even out the pricing. It has to be them because shares actually have to move between exchanges. At least, they would have to agree to it and work with the intermediary to enable interacting with the various coding on the exchanges. Arbitrage cannot take place if the shares can't move - the entire point of arbitrage is that the "good" is being bought one place for cheap and sold at another for a higher price. Its possible that this could benefit both exchanges. |
|
|
|
|
Show Posts
