Thanks, for pointing that out, I had no idea there was such a big exploit in the mtgox payment system.
I'll work on a bitcoin payment system right now.
I am interested in this.
The offers make me think I don't understand though.
Are the prices really in BTC? Why is 19.8667 the price for the option to buy 10BTC for $1? They all seem wrong like this.
It does seem a bit confusing at first. I agree that the prices right now are very high, but I think that is mostly because of the extreme volatility of the BTC/USD exchange.
As the price stabilizes, I think the option premium's will become lower too. For example, the BTC/USD 0.2 Put for May 31 gives the option to buy 0.2BTC for $1. If someone wanted to go long BTC (i.e - they think BTC will go much higher than it is currently), and the current rate is 0.15BTC/$1, they can buy the put option and what they are doing is getting their trade leveraged at 0.2/ 0.05, i.e - a 4:1 leverage for the price of the premium.
A seller who is short BTC(or thinks the BTC will not go that high by May 31) can sell this option right now and collect the premium immediately. If he is right, and the option exprires worthless, the seller will gain that premium for simply writing that option.
It looks like you're quoting the prices and options strikes in BTC/$ rather than $/BTC which is the reverse of what most people are used to dealing with.
What was the rational for this?
Thank for pointing that out. I wasn't sure in what direction to go initially - my original plan was to make a anonymous derivatives exchange where the account currency will be BTC. However, you're right that most people aren't used to thinking in terms BTC yet.
Do you think it will be less confusing if the account funds are still denominated in BTC, but the option strike prices are USD/BTC rather than BTC/USD? I don't want anyone to become confused with the put/call options that way, but if that makes easier for people to conceptualize, then its a easy change to make.