[OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[CambioBTC]

If you guys don't like the way Bitfinex handled the situation, go trade at MtGox.

(keep doing what you do Raphael  )

How about you just STFU ?

[vokain]

down at time of this post for me

[sleger]

down at time of this post for me

Indeed it was, back up now but very slow

[MelMan2002]

...seems to be down again...

[Nathanael_]

Wow this is absolute bullshit. Lost money yesterday, and now BFX is down and I can't close my short position as we go up and i lose again because of Binfinex's bullshit.

The people in this forum that are not frustrated just simply have not lost significant amounts of money because of Bitfinex incompetence.

Brutal.

[Indamuck]

BFX,

You need to institute circuit breakers. They might look something like this:

Each day breakers are triggered when the market falls 20% (?) from the day's opening price. At any point when the market falls to -20% the minimum ask becomes -20%, fixed for a set period, say 30 minutes. After 30 minutes prices are then free to fall an additional 10% etc.

So take yesterday for example. Assume the opening (12:01am?) market level was $700. So if the market fell, the min ask would be $540. As the market collapsed below that offers would not be accepted below $540 but the system could accept all bids. In this way there is a 30 minute window for trades to be entered/matched in an orderly manner.

You can structure the circuit breakers to try and protect lenders, if that is your aim, but recognize that when you have a policy for managing fast markets, it is very bad form to change the rules on the fly.

Many markets use circuit breakers to positive effect. We are not inventing the wheel.


Today you basically raped traders to protect Bitfinex' lending function. Not sure why any trader would put themselves in that position again. I had submitted a Market Order to buy at about the $550 level ... thanks a lot.

[mooncake]

Feel free to post any suggestion.
We will pay you if they make sense.
Otherwise just stop talking nonsense.

Giancarlo
Bitfinex Team

I like to take a shot at the bounty.

Look at your existing measures. For one, you manage the leverage ratio. When the market is volatile, you tighten it, and vice versa. This is good. But volatility over days can be managed, how about volatility over minutes?
Suggestion: Keep this measure. Work on transparency and communication. Transparency - Define volatility in the context of leverage ratio. Communication - Make the leverage ratio prominent for margin traders on your website.

For volatility over minutes, there is no need to reinvent the wheel. Look at what the major exchanges are doing and adapt it accordingly. The basic principles are the same: Buy high sell low, leverage, panic sell during crashes, fanatic buy during rally. One word: greed. It is not the exchange owner's responsibility to manage greed but you certainly do not want them to lose everything. It is bad publicity.
The common measure is a circuit breaker which depends on 2 factors: price and time.
Suggestion: Implement a circuit breaker. Consult users on: Extent of volatility, halt duration and additional measures when halt is lifted.

Other measures are a possibility. But you certainly want them to be easily understandable and implementable. Measures too innovative (defined as measures unique to BFX) will cause confusion. It is good to consult users too before implementing any measures. One way is to put up a vote. You make the final call using users' preferences as a reference.

[CambioBTC]

Wow this is absolute bullshit. Lost money yesterday, and now BFX is down and I can't close my short position as we go up and i lose again because of Binfinex's bullshit.

The people in this forum that are not frustrated just simply have not lost significant amounts of money because of Bitfinex incompetence.

Brutal.

Currently dropping from 709,
wanted to short, but your post
gave me second thoughts,
did you get that problem solved ?,
The last thing I want to do is get
stuck in a short that I'm unable to close.

[watuba]

Feel free to post any suggestion.
We will pay you if they make sense.
Otherwise just stop talking nonsense.

Giancarlo
Bitfinex Team

I like to take a shot at the bounty.

Look at your existing measures. For one, you manage the leverage ratio. When the market is volatile, you tighten it, and vice versa. This is good. But volatility over days can be managed, how about volatility over minutes?
Suggestion: Keep this measure. Work on transparency and communication. Transparency - Define volatility in the context of leverage ratio. Communication - Make the leverage ratio prominent for margin traders on your website.

For volatility over minutes, there is no need to reinvent the wheel. Look at what the major exchanges are doing and adapt it accordingly. The basic principles are the same: Buy high sell low, leverage, panic sell during crashes, fanatic buy during rally. One word: greed. It is not the exchange owner's responsibility to manage greed but you certainly do not want them to lose everything. It is bad publicity.
The common measure is a circuit breaker which depends on 2 factors: price and time.
Suggestion: Implement a circuit breaker. Consult users on: Extent of volatility, halt duration and additional measures when halt is lifted.

Other measures are a possibility. But you certainly want them to be easily understandable and implementable. Measures too innovative (defined as measures unique to BFX) will cause confusion. It is good to consult users too before implementing any measures. One way is to put up a vote. You make the final call using users' preferences as a reference.

I generally agree with this.  I'll post more suggestions if I think of anything.

I just want to add that throughout these tough times for the market and Bitfinex, I was really impressed with the responsive customer support by Giancarlo and Raphael.  They have a really tough job in making the first and only BTC margin exchange, and while they may be compensated well when the markets aren't crazy, they're certainly taking big hits and eating huge losses when things don't go well.  While I don't have a ton of experience in trading on leveraged exchanges, it seems like these experiences will allow them to make corrections necessary and possibly adjust the site's risk profile.  Unlike MtGox and the many other shady businesses we've seen so far in the Bitcoin space, these guys are always available, responsive, and giving it 110%.  Thanks for the great service, and I'm pretty confident you guys will find working solutions.  

[Ichthyo]

after reading the backlog in this thread....

one thing which seems to be blatantly absent with many traders quite vocal in this thread is common sense.

If you want to achieve something, you need to be willing to use the appropriate means: If you want to trade quick swings over several $100 in a matter of seconds, you need a guaranteed reliable market access, and you need a trading link which responds in terms of milliseconds. If you attempt the same with just some website service, you're lacking common sense. Or to put it the other way round, you aren't acting rational, you're gambling. If you gamble, you loose on average. If you do it for the adrenaline, then please go for it, but don't whine afterwards.

You can apply rational strategies even with an unreliable slow market link. Just use more long term strategies then. For example, if you'd traded some kind of market-follow strategy, maybe even some dead simple "average crossover", then you'd be switched over to shorting days ago when we went below $800 and you'd be taking home money now. Or at least you'd be stepped out and watch the drama from the sidelines.

The trick is to find a pattern of behaviour which you are really capable of keeping up long time, and which is profitable on average.

[CambioBTC]

Wow this is absolute bullshit. Lost money yesterday, and now BFX is down and I can't close my short position as we go up and i lose again because of Binfinex's bullshit.

The people in this forum that are not frustrated just simply have not lost significant amounts of money because of Bitfinex incompetence.

Brutal.

Is anyone else having this problem
of not being able to close shorts ?


Don't want to get stuck in a position I can't get out of.

[alpha492]

Wow this is absolute bullshit. Lost money yesterday, and now BFX is down and I can't close my short position as we go up and i lose again because of Binfinex's bullshit.

The people in this forum that are not frustrated just simply have not lost significant amounts of money because of Bitfinex incompetence.

Brutal.

Is anyone else having this problem
of not being able to close shorts ?


Don't want to get stuck in a position I can't get out of.

Yepper, already lost 2k as of now

[Lonechaos]

Wow this is absolute bullshit. Lost money yesterday, and now BFX is down and I can't close my short position as we go up and i lose again because of Binfinex's bullshit.

The people in this forum that are not frustrated just simply have not lost significant amounts of money because of Bitfinex incompetence.

Brutal.

Is anyone else having this problem
of not being able to close shorts ?


Don't want to get stuck in a position I can't get out of.

It's working fine for me.

Edit: Chrome doesn't work, but works in Firefox and on my  phone

[mccoyspace]

after reading the backlog in this thread....

one thing which seems to be blatantly absent with many traders quite vocal in this thread is common sense.

If you want to achieve something, you need to be willing to use the appropriate means: If you want to trade quick swings over several $100 in a matter of seconds, you need a guaranteed reliable market access, and you need a trading link which responds in terms of milliseconds. If you attempt the same with just some website service, you're lacking common sense. Or to put it the other way round, you aren't acting rational, you're gambling. If you gamble, you loose on average. If you do it for the adrenaline, then please go for it, but don't whine afterwards.

You can apply rational strategies even with an unreliable slow market link. Just use more long term strategies then. For example, if you'd traded some kind of market-follow strategy, maybe even some dead simple "average crossover", then you'd be switched over to shorting days ago when we went below $800 and you'd be taking home money now. Or at least you'd be stepped out and watch the drama from the sidelines.

The trick is to find a pattern of behaviour which you are really capable of keeping up long time, and which is profitable on average.

This!
I had set up my short a while back and had several tiers of limit buys in place to close it out at a profit, plus some stops above in case it crapped out the top.
When I woke up this morning it was already all over. All my buys had been hit and my position was closed and I made good money. No drama.
I also had some USD loans out so I was glad they were not going to just watch it all burn up. It worked out for me. I have no complaints.

[sangaman]

I've noticed now that after every time I place a liquidity offer, the page refreshes and goes back to the USD lending screen even if I was on BTC or LTC before. Up until recently, there would be no page refresh. Can we go back to having this behavior?

[alpha492]

BFX,

You need to institute circuit breakers. They might look something like this:

Each day breakers are triggered when the market falls 20% (?) from the day's opening price. At any point when the market falls to -20% the minimum ask becomes -20%, fixed for a set period, say 30 minutes. After 30 minutes prices are then free to fall an additional 10% etc.

So take yesterday for example. Assume the opening (12:01am?) market level was $700. So if the market fell, the min ask would be $540. As the market collapsed below that offers would not be accepted below $540 but the system could accept all bids. In this way there is a 30 minute window for trades to be entered/matched in an orderly manner.

You can structure the circuit breakers to try and protect lenders, if that is your aim, but recognize that when you have a policy for managing fast markets, it is very bad form to change the rules on the fly.

Many markets use circuit breakers to positive effect. We are not inventing the wheel.


Today you basically raped traders to protect Bitfinex' lending function. Not sure why any trader would put themselves in that position again. I had submitted a Market Order to buy at about the $550 level ... thanks a lot.

Once again, imo the solution here is not flat 'circuit breakers' it is not the responsibility of the exchange to dictate fluctuations in price.  There will be times the market fluctuates 10-20 in very short intervals, its the game were all playing and the nature of a free market.

The real problem that Bitfinex needs to take responsibility for is the potential for their own system to sink the market.  I think the staff explained pretty clearly why they halted trading, cascading margin calls would have resulted in a temporary crash to 0.  However in my case they halted trading resulting in my trailing stop buy not triggering when it should have reasonably triggered at 545 (if BTX followed stamp exactly).

A reasonable solution here would meet 2 criteria

1.) A solution in which market activity reflected a cross all exchanges is not inhibited

- Lenders seem to have a hard time with this one, the market will swing 10-15% if part of your funds are lost on a very natural market movement that is your responsibility as a lender, and you must own it.  BFX kindly offers insurance which is an offer I think you would have to be crazy not to take.

2.) A solution in which the flaws of the BFX system are mitigated.

- The problem here is clearly that BFX sometimes must halt trading in order to protect lenders and traders.  In forex/stock markets brokers hire 'market makers' in order to ensure things like this don't happen.  In regulated markets 'circuit breakers' are also an option but I think most traders would feel uncomfortable with a centralized authority dictating when the market has 'moved too much'

As far as I've seen these are the reasonable solutions I've seen offered

1.) A breaker tied to the Bitcoin price index that will halt trading if BFX prices fall out of a certain range relative to other markets

2.) A market maker to ensure adequate buy/sell support at all time

3.) Scaled leverage option in order to encourage traders to enter a position on the less supported side of the market

4.) A simple option to temporarily turn off margin calls during periods where the system is at risk of cascading

I've enjoyed trading on finex although these system failures have manage to lose me about 2k today, the staff seems responsive and usually is able to come up with responsible and equitable solutions to these problems.  However, in order for me to continue trading at BFX this is what I feel needs to happen immediately.

1.) BFX needs to come up with some sort of order of operations handling post crash halts.  Many limit orders were executed for sub 200 dollars but b/c I used a trailing stop buy my buy order was ignored until after the halt.  This doesn't seem fair b/c if BFX had followed Stamp exactly I should have bought out of my short at 545.  They need a clear and transparent way for deciding who's orders get executed after a halt.  Just the lowball limit orders (which would be bullshit imo that would just encourage people to take advantage of the system) the trailing stops, the stops, or just whoever put the order in first?

2.)  BFX needs to come up with some way to warn customers that a halt is/may come under effect.  IMO a gigantic fucking banner a cross the top of the website saying something like 'ALERT: Trading has been temporarily halted'.  An email might be nice to.

I think these are pretty reasonable requests that should be fairly quick for the staff to implement, and would be a great service to both traders and lenders.

[alpha492]

after reading the backlog in this thread....

one thing which seems to be blatantly absent with many traders quite vocal in this thread is common sense.

If you want to achieve something, you need to be willing to use the appropriate means: If you want to trade quick swings over several $100 in a matter of seconds, you need a guaranteed reliable market access, and you need a trading link which responds in terms of milliseconds. If you attempt the same with just some website service, you're lacking common sense. Or to put it the other way round, you aren't acting rational, you're gambling. If you gamble, you loose on average. If you do it for the adrenaline, then please go for it, but don't whine afterwards.

You can apply rational strategies even with an unreliable slow market link. Just use more long term strategies then. For example, if you'd traded some kind of market-follow strategy, maybe even some dead simple "average crossover", then you'd be switched over to shorting days ago when we went below $800 and you'd be taking home money now. Or at least you'd be stepped out and watch the drama from the sidelines.

The trick is to find a pattern of behaviour which you are really capable of keeping up long time, and which is profitable on average.

You must not be reading very clearly, the system glazed over trailing stop buys post halt.  That means according to your criteria of 'reasonable trading' those of us who wen't short in the 630 range and used trailing stops to ensure an exit still lost money even though markets not effective by the halt/cascading margins calls dropped to 530.

Congratulations, you closed your positions with a limit order, so did the guys who had bullshit limits at sub 300 pricing.

So I guess what your really saying is 'Finex is broken, and everyone else is stupid for expecting anything but limit orders to work'.

BTW trailing stop orders are server-side, not client side.  Unless they're running this entire operation off a 2002 laptop the response time of the server shouldn't have mattered.

[alpha492]

Just an update on my end of things,

It seems BFX just reversed my losses for my trailing stop being closed after the halt.  I did not receive the profits from the position but I understand from there position its a tricky situation.

I feel the result was pretty fair as I can't really complain about not profiting from a situation neither party could seem coming.

I appreciate the effort and quick response from the BFX staff.

[hyphymikey]

So let me get this straight...

Go long --> crash down due to domino effect of longs closing --> saved by roll back of trades
Go short --> crash down due to domino effect of longs closing --> lose by roll back of trades (not able to close position at a profit)

Go long --> crash up due to domino effect of shorts closing --> lose by roll back of trades? Will you roll back trades in this instance?
Go short --> crash up due to domino effect of shorts closing --> saved by roll back of trades? Will you roll back trades in this instance?


So we are paying you for a service that if I wanted to profit during a crash, would be impossible?

You say you roll back trades due to lenders losing money, but I've asked multiple times how can lenders loose if positions are forced closed before the possibility of lenders loosing, with no answer.
Who cares if the price goes to zero, some people get cheap coins, lenders don't lose a thing, and the next trade after zero can be any number, possibly only a penny less than before the domino effect began.

I lost money last night because ___________?

If you can give me a legit answer to my last question, which defies everything said in this entire post, then I will give up. If not, give me my profit I should have earned. Pretty simple deal if you ask me.

[aragalie]

On a different note: i hope BFX is ramping up their servers and the team for the inherent demise of Mt Gox. I'm envisioning a mass-migration of the late adopters there (those still there who were too lazy/trustful to move until now) to BFX.

Similar to what happened when Google shut down GoogleReader and all its competing RSS services were suddenly flooded with new users..