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Author Topic: I want to send money throug bitcoin, is there anyway to overcome the votality?  (Read 1874 times)
finway
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December 05, 2011, 03:52:45 AM
 #1

Is there anyway of hedging?

eg: I bought some 1k BTC at $3, If i pay $10, can anyone or anything make sure i can sell my 1k BTC at $3 ?


maybe some Derivatives can be made ?   can Derivatives be p2p?


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Eveofwar
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December 05, 2011, 03:53:48 AM
 #2

Is there anyway of hedging?

eg: I bought some 1k BTC at $3, If i pay $10, can anyone or anything make sure i can sell my 1k BTC at $3 ?


maybe some Derivatives can be made ?   can Derivatives be p2p?



How about a 1000 BTC sell order at $3 on MtGox ?
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December 05, 2011, 03:57:45 AM
 #3

Is there anyway of hedging?

eg: I bought some 1k BTC at $3, If i pay $10, can anyone or anything make sure i can sell my 1k BTC at $3 ?


maybe some Derivatives can be made ?   can Derivatives be p2p?



How about a 1000 BTC sell order at $3 on MtGox ?

That does not guarantee that the sell order will be filled if the price drops.

finway
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December 05, 2011, 03:59:53 AM
 #4

How about a 1000 BTC sell order at $3 on MtGox ?

you can't sell BTCs at MtGox when you dont' have BTCs,
and you can't conclude this deal  when the price is at $2.8


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December 05, 2011, 04:04:03 AM
 #5

Is there anyway of hedging?

eg: I bought some 1k BTC at $3, If i pay $10, can anyone or anything make sure i can sell my 1k BTC at $3 ?

maybe some Derivatives can be made ?   can Derivatives be p2p?


May I ask why you bought all these bitcoins?

What is your time frame to lock in the $3 price?  I'm sure someone can plug that into a Black-Sholes model and write you a $3 put contract.  But given bitcoin's volatility, and the $2.80 price, you'll probably pay 50 cents per bitcoin for it.


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December 05, 2011, 04:18:02 AM
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I would love to write covered calls on my bitcoins....... 

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December 05, 2011, 06:37:37 AM
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I would love to write covered calls on my bitcoins....... 

You can do this now...

You can issue a contract with whatever legal terms you wish, and distribute shares in that issue. People can trade those shares on markets.

You can also write scriptable clauses, that will stash funds from the listed accounts, or make payments on a regular schedule, etc.


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finway
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December 05, 2011, 06:45:58 AM
 #8

May I ask why you bought all these bitcoins?
I just want to transfer my money from China to USA, for example.

What is your time frame to lock in the $3 price? 
Let's say 1 hour (6 confirms)


I just want to send money through bitcoin and overcome the risk to bitcoin's price,
Is there anyway to make this type of fee constant(irrelevant to the price of bitcoin)?



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December 05, 2011, 01:11:53 PM
 #9

May I ask why you bought all these bitcoins?
I just want to transfer my money from China to USA, for example.

What is your time frame to lock in the $3 price? 
Let's say 1 hour (6 confirms)


I just want to send money through bitcoin and overcome the risk to bitcoin's price,
Is there anyway to make this type of fee constant(irrelevant to the price of bitcoin)?




No. The essence of Bitcoin is that its value floats, it is not tied to a dollar value, its value can go up or down due to market forces.

However, I would think that within an hour, the price will "probably not" swing very greatly.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
finway
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December 05, 2011, 03:14:42 PM
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No. The essence of Bitcoin is that its value floats, it is not tied to a dollar value, its value can go up or down due to market forces.
However, I would think that within an hour, the price will "probably not" swing very greatly.

3% is "Great".

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December 05, 2011, 03:38:51 PM
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No. The essence of Bitcoin is that its value floats, it is not tied to a dollar value, its value can go up or down due to market forces.
However, I would think that within an hour, the price will "probably not" swing very greatly.

3% is "Great".

I mean that if you buy 1000 BTC, immediately transfer them, and then the other person immediately tries to sell them by placing a sell order at the same price you bought them, your order will likely be filled within an hour or two. But this is of course not guaranteed.

If it is absolutely crucial that your funds transfer maintain the same dollar value, you will be best off sending dollars and not using Bitcoin. I would recommend you use Dwolla.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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December 05, 2011, 03:45:22 PM
 #12

No. The essence of Bitcoin is that its value floats, it is not tied to a dollar value, its value can go up or down due to market forces.
However, I would think that within an hour, the price will "probably not" swing very greatly.
3% is "Great".
3% is probably much less than what it would cost you to hedge against the risk. It's also less than what it would cost you to use an alternative like PayPal. And remember, as opposed to these options, it's not a 3% loss, it's a 3% fluctuation which could be either up or down and in expectation makes no difference.

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December 05, 2011, 03:49:05 PM
 #13

Sounds like your looking to buy insurance.

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December 05, 2011, 03:52:45 PM
 #14

Take 10% - short with 10:1 leverage on bitcoinica.. there's you're hedge.

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December 05, 2011, 03:52:57 PM
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Sounds like your looking to buy insurance.

lol its true, i would love me a piece of this also.

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finway
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December 05, 2011, 03:58:16 PM
 #16

Sounds like your looking to buy insurance.
You can say that.
Insurance need to be there while sending money through the volatile bitcoin.

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December 05, 2011, 04:12:01 PM
 #17

At times market is very quiet (low volume on mtGox) and the price is very flat, perhaps that would be the best time to send a larger amount? But of course, there are never any guarantees. Another solution could be to send the money in batches, that way you'd spread the risk out more. You could also look for a slight uptrend and send the funds then, but again it would be no guarantee, but if you're lucky you could even make a few percents off your transfer.
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December 05, 2011, 04:16:35 PM
 #18

How about buying 1000 BTC's for 3$ each and selling them for let's say 4,50$ each? The market volatility works both ways, You never know for sure.

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finway
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December 05, 2011, 04:17:56 PM
 #19

I think MtGox or Bitconica should develope some "FUTURE" or "OPTION" products,

then i can't buy some bitcoins and sell some FUTUREs.

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December 05, 2011, 04:35:43 PM
 #20

I see a lot of interest in using bitcoin as an intermediate currency just to transfer other currencies from place to place.  Even without the volatility issue, I'm not sure how cost effective it is.  Exchanging between bitcoin and other currencies has costs: both the fees charged by exchanges as well as the spread (e.g. the price at which you can buy 100 BTC is not the same as the price at which you can sell 100 BTC, even ignoring fees).  You could easily lose a few percent to currency exchange costs.  It's still a lot better than paying a $50 wire transfer fee on a $1 transfer for example, but in many situations you may not come out ahead.
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