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 Author Topic: ICBIT Derivatives Market (USD/BTC futures trading) - LIVE  (Read 95602 times)
xeverse
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 February 02, 2013, 04:31:57 PM

Does anybody know how Initial Margin is calculated as a function of the price?
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Fireball
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 February 02, 2013, 07:59:11 PM

Does anybody know how Initial Margin is calculated as a function of the price?

The formula is empiric, however, now it's 75% of the maximum possible variation margin within given trading limits.

Or using simple words: if one buys 1 contract at the highest price of the trading range, and then sells it at the lowest possible price - this gives max. possible loss for the current session. Variation margin is set to 75% of this percent.

Now, for example, if you want to buy 100 contracts worth of \$1000 in total, the initial margin required would be 7 BTC (or roughly \$140).

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
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 February 03, 2013, 09:30:39 AM

The formula is empiric, however, now it's 75% of the maximum possible variation margin within given trading limits.
"Maximum price change within one trading session: 10% in each direction relative to the close price of the last trading session."

What's is going to happen if the price breaks the trading limits during the current session?
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 February 03, 2013, 09:36:46 AM

The formula is empiric, however, now it's 75% of the maximum possible variation margin within given trading limits.
"Maximum price change within one trading session: 10% in each direction relative to the close price of the last trading session."

What's is going to happen if the price breaks the trading limits during the current session?
It cannot.  You can only place bids/asks within the limit, and cannot accept bids/asks outside the 10% limit either.  But as I understand it, Fireball reserves the right to make an extra clearing (and thus start a new trading session and move the 10% frame) in case of extraordinary volatility.
xeverse
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 February 03, 2013, 04:23:30 PM

It cannot.  You can only place bids/asks within the limit, and cannot accept bids/asks outside the 10% limit either.
Margin call and stop out levels are the same? 0.75im?

Forty ticks to breakeven?
Fireball
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 February 05, 2013, 11:06:57 PM

New GOLD and OIL futures with April 2013 expiration are already there, so feel free to put your orders. Specification and more updates come next day.

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
Ichthyo
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 February 06, 2013, 04:23:54 AM

New GOLD and OIL futures with April 2013 expiration are already there, so feel free to put your orders.

very much appreciated!
Fireball
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 February 06, 2013, 03:36:27 PM

I'm rolling up a few updates to the website, so it may be on and off till night (european time). If you're logged in, your trading is not going to be affected. Trying to make downtime as small as possible.

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
Fireball
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 February 07, 2013, 01:51:38 PM

Ok, finally the improved web design is up on Icbit. There are still a few minor things to fix here and there, but overall it should make the experience of using Icbit web site more smooth and easier to learn.

If there is anything wrong - please report here.

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
segabtc
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 February 08, 2013, 02:17:37 PM

Do not see see the NEW oil and gold futures?
Fireball
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 February 08, 2013, 02:52:14 PM

Do not see see the NEW oil and gold futures?

It's there:
https://icbit.se/GDJ3
https://icbit.se/CLJ3

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
davidoski
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 February 09, 2013, 07:20:37 AM

I did recently a 40 contract trade which showed 0.2 BTC trading fee. I started to think how it works and realized that the more BTC is gaining in price against the dollar the more trading fee is.

1 contract is worth 10 USD and the trading fee for that is 0.005 BTC. At the current USD/BTC level (22 USD) that means the trading fee is 0.11 USD:

1 contract = 10 USD = 0.11 USD fee (at 22 USD/BTC level) = 1.1% fee (2.2% for both trades)

Let's see what fee will be at 44 USD/BTC level - calculation is pretty simple:

1 contract = 10 USD = 0.22 USD fee (at 44 USD/BTC level) = 2.2% fee (4.4% for both trades)

But trading contract means that you essentially have to sell and buy or buy and sell therefore fees have to be doubled.

I think that the current trading fee is already huge (1.1% and 2.2% for opened and closed trade). It will soon be untradable if the BTC price goes higher which is rather probable.

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Fireball
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 February 09, 2013, 04:01:51 PM

I think that the current trading fee is already huge (1.1% and 2.2% for opened and closed trade). It will soon be untradable if the BTC price goes higher which is rather probable.

- The ultimate goal is to break depends on fiat currencies, be it USD, EUR or whatever else. So recalculating a fee based on BTC/USD rate would not be really correct (e.g. if the contract is for 100kg of potatoes, and quoted in potatoes kg per 1 BTC, you're saying that the fee calculated in potatoes is too high, because BTC rose in value)
- We really avoid changing contract specification of a contract which already trades. So if BTC rises in value too much, new contract will be adjusted for that, and the fees lowered.
- These fees are not really to fill my own pocket. Fees are used to insure against non-paying users. And since all accounting is performed in Bitcoins (my dream which came to reality), I see no reason to make fees dependent on USD.

And some ideas we are considering to implement in future:
- Discounts for high volume traders.
- Discounts for liquidity providers.

And finally, could someone tell me, what "fees" (effective) were on the infamous Bitcoinica?

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
davidoski
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 February 09, 2013, 04:12:56 PM

A comment about the first comment. If the "ultimate goal is to break... bla bla bla..." so why the contract itself is calculated in USD not in BTC? If the contract was calculated in BTC the fee would not rise with the USD/BTC rate and remained steady.

Bitcoinnica was a looting operation. If you justify current fees by being similar you are effectively saying that icbit.se is a looting operation too. And with such high fees it actually is.

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Fireball
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 February 09, 2013, 05:17:20 PM

A comment about the first comment. If the "ultimate goal is to break... bla bla bla..." so why the contract itself is calculated in USD not in BTC? If the contract was calculated in BTC the fee would not rise with the USD/BTC rate and remained steady.
Variation Margin is calculated in BTC, so you get BTC as profit, not USD. It's up to you how to use this profit - convert to USD, or buy something directly. You're not obliged to sell your profit for USD.
The contract price is quoted in USD though, because USD per BTC is way more common in Bitcoin community than BTC per USD. The math is that you can convert one to another by doing 1/x operation (23.55 USD per 1 BTC equals to 0.0424628 BTC per 1 USD).

Bitcoinnica was a looting operation. If you justify current fees by being similar you are effectively saying that icbit.se is a looting operation too. And with such high fees it actually is.
The question was: "And finally, could someone tell me, what "fees" (effective) were on the infamous Bitcoinica?". Do you see any justification in it? I don't.

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
davidoski
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 February 09, 2013, 06:14:59 PM

I suppose you wouldn't see an elephant in the room as long as it represents a high fee that people need to pay you for trading.

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picobit
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 February 09, 2013, 06:21:16 PM

Bitcoinnica was a looting operation. If you justify current fees by being similar you are effectively saying that icbit.se is a looting operation too. And with such high fees it actually is.

You know the fee beforehand, so I really think it is unfair to call it looting.  Bitcoinica lost all its customers' money, the customers did not know beforehand (obviously), although it looked more like incompetence than looting.

(e.g. if the contract is for 100kg of potatoes, and quoted in potatoes kg per 1 BTC, you're saying that the fee calculated in potatoes is too high, because BTC rose in value)

If the price of potatoes drop dramatically, a potato trading company would not be able to keep the same fee/markup in whatever currency they use, but would have to lower it proportionally to the dropping price.

davidoski
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 February 09, 2013, 06:26:50 PM

You know the fee beforehand, so I really think it is unfair to call it looting.

Try to find it on the icbit.se website.

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Fireball
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 February 09, 2013, 06:37:49 PM

You know the fee beforehand, so I really think it is unfair to call it looting.

Try to find it on the icbit.se website.
It's stated right in the create order window, which you use to issue buy or sell orders, right below the total value and initial margin value. It's specifically put there so that users would clearly see the fee.

The fee is constant, and doesn't vary like it does in services using FOREX trading model with spread (which can be either narrow or wide).

Hence my question about fees on Bitcoinica.

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
davidoski
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 February 09, 2013, 06:45:17 PM

Before anyone gets there it's the one who decided to start trading. Might be too late to figure out how it really works. Like me, my friend.

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