Offer BTC Options

[Eisenhower34]

$30 which is ~30% premium for a 30 day contract?  in the real option market people will only pay those kind of price if they expect a blackswan event like the lehman collapse, but given btc's volatility it may be justified except you have no hedge.

No its not justified, but I would have to charge that and thats why I dont offer put options. The extra of $15 wouldnt go into my pocket, I would have to pay them as fee to short the btc ("loan" the btc which I then sell to cover the option).

So i guess the plan is to keep pocketing the premium on those naked puts until a time when(if) btc crashes and blowup your account then default on the contracts. Not a bad gig, many sell side funds have done just that on the street

All my options are backed up by BTC. I wouldnt sell a 5 BTC call option without having those 5 BTC in my wallet, otherwise a price jump would indeed put me in trouble. I always state in my op which option liabilities I have so everyone can decide if they trust me to keep my word.

Even if I would sell "uncovered" options (which I dont do) I am very liquid. As you can see in my loan thread (check op for the link) I can cover all liabilites up to $6000 only with the loans I have outstanding (im the lender, not the borrower!) without problems

[mrkent]

i agree, but you cannot be a market maker without a way to short the btc in order to hedge the put contracts written, it's suicide to sell naked puts on btc. Just having calls like what the OP did doesnt do much. So until there is a way to short btc, you wont see any kind of real option exchanges for btc.

MMs will come when they have a place to come to

[Eisenhower34]

op updated

[Eisenhower34]

hm looks like the market for options is pretty thin or maybe they just dont find my thread... noone interested?

[Eisenhower34]

still 5 available

[mprep]

Good luck with it.

[TECHICENINE]

are you offering put options only one way is more just selling BTC lol have huge buyer here...thanks

[Eisenhower34]

are you offering put options | only one way is more just selling BTC | lol have huge buyer here...thanks

I only understood "are you offering put options". Dont know what the middle part should mean.
No Im not offering put options. I dont have a cheap way to short BTC so the fee would be so high that it would be unattractive for you to buy them.
If your buyer wants some put options and hold right now some BTC, tell him to sell his BTC and buy call options. In case the price drops enough he made a nice profit because he sold his btc earlier high. In case the price rises enough he makes a nice profit with the call options.

And just to mention, I dont have the funds to "satisfy" a huge buyers demand.

[Eisenhower34]

bump with new options

[danieldaniel]

Can I do $110 for 30 days for 0.5 BTC, with a $5 fee (because of the small amount)?

[maco]

Can you help me understand what the options are in-depth?

I am trying to wrap my head around it.. Thanks in advance!

[Eisenhower34]

Can I do $110 for 30 days for 0.5 BTC, with a $5 fee (because of the small amount)?

Sorry, but the fee doesnt scale at all with the amount... and for negotiation the fee (I guess you meant $5 per BTC) is far too small and away from my initial offer of $20 per BTC. You have to understand that I will have to cover the call option with BTC. So if the BTC price drops by more than $5, then I end up with a USD loss. In the last 30 days the price has gone down from ~$130 to now $95, so I guess everyone buying a call option for just $20 /$25 has a good chance to make some nice profit with this deal while I still have a good risk to lose USD if the price drops by another $35...

Can you help me understand what the options are in-depth?

Im not sure how to explain them better than already done in here by DeathAndTaxes for example:

can you explain what those options mean?(sorry for being a noob)

[For a call options $135 strike @ $30 fee 3 months, max 10 BTC] it means you can pay $30 per BTC and have the right but not obligation to purchase 1 BTC @ $135 anytime in the next three months.  Obviously since you are paying a $30 premium your break even point is $165.  If you believe that BTC exchange rate will exceed $165 in the next three months you would profit.

If you want something more detailed you can check out wikipedia:

The call option I offer is described in here: http://en.wikipedia.org/wiki/Call_option
The counterpart of a call option, the put option: http://en.wikipedia.org/wiki/Put_option

[danieldaniel]

Can I do $110 for 30 days for 0.5 BTC, with a $5 fee (because of the small amount)?

Sorry, but the fee doesnt scale at all with the amount... and for negotiation the fee (I guess you meant $5 per BTC) is far too small and away from my initial offer of $20 per BTC. You have to understand that I will have to cover the call option with BTC. So if the BTC price drops by more than $5, then I end up with a USD loss. In the last 30 days the price has gone down from ~$130 to now $95, so I guess everyone buying a call option for just $20 /$25 has a good chance to make some nice profit with this deal while I still have a good risk to lose USD if the price drops by another $35...

Can you help me understand what the options are in-depth?

Im not sure how to explain them better than already done in here by DeathAndTaxes for example:

can you explain what those options mean?(sorry for being a noob)

[For a call options $135 strike @ $30 fee 3 months, max 10 BTC] it means you can pay $30 per BTC and have the right but not obligation to purchase 1 BTC @ $135 anytime in the next three months.  Obviously since you are paying a $30 premium your break even point is $165.  If you believe that BTC exchange rate will exceed $165 in the next three months you would profit.

If you want something more detailed you can check out wikipedia:

The call option I offer is described in here: http://en.wikipedia.org/wiki/Call_option
The counterpart of a call option, the put option: http://en.wikipedia.org/wiki/Put_option

Oh, that price is per BTC.  I thought it was per 5 BTC.

[Eisenhower34]

Then I would buy some of my options myself

[Eisenhower34]

op updated, 10 more BTC available

[Eisenhower34]

due to the replies here and some PMs I offer some put options too.

[maco]

How is it working out so far?

How can you trust people to offer such options?

due to the replies here and some PMs I offer some put options too.

[Eisenhower34]

I started to offer put options yesterday and didnt sell one so far while two call options has been sold so far... does this answer your "How is it working out so far?"
Check the op to check my liquidity. I always limit the amount I want to "risk" by the amount of BTC i sell as option so I can pay out in all cases .

[Eisenhower34]

bump

[Eisenhower34]

update