Margin Trading and Options Soon on MTGox

[bittenbob]

I just noticed today when I logged in that MTGox appears to be in the process of setting up margin trading and options. This could pose a bit of a problem for bitcoinica but it should be interesting to see what effect this has on the markets. My thoughts are that it will attract more investors and boost bitcoin prices for the long term. I did not see any topic under speculation discussing this so I figured why not start a thread.

[ineededausername]

Proof?  I can't see anything.

[fastandfurious]

Interesting. Where did you see that?

[bittenbob]

Proof?  I can't see anything.

Go to classic.mtgox.com and make sure you arent logged in. Its under advanced options... Screen to fllow

[bittenbob]

[ineededausername]

That's been there for a while! lol

[bittenbob]

LOL ok then I guess I just havent been paying attention. If it has been soon for so long then does anyone know the current status on this? If this was up before their big countdown then thats what I really would have expected the countdown to be to.

[StewartJ]

I just noticed today when I logged in that MTGox appears to be in the process of setting up margin trading and options. This could pose a bit of a problem for bitcoinica but it should be interesting to see what effect this has on the markets. My thoughts are that it will attract more investors and boost bitcoin prices for the long term. I did not see any topic under speculation discussing this so I figured why not start a thread.

What do you see on Mt Gox that makes you think this is so?  

Would be nice on MT Gox to be able to create Stop/Stop Limit Orders.

Kind of limited trading right now with just market/limit orders.

[JoelKatz]

Jered mentioned that TradeHill had this in the works at Google last week.

[ineededausername]

Jered mentioned that TradeHill had this in the works at Google last week.

Jered was at Google?

[bittenbob]

I just noticed today when I logged in that MTGox appears to be in the process of setting up margin trading and options. This could pose a bit of a problem for bitcoinica but it should be interesting to see what effect this has on the markets. My thoughts are that it will attract more investors and boost bitcoin prices for the long term. I did not see any topic under speculation discussing this so I figured why not start a thread.

What do you see on Mt Gox that makes you think this is so?  

Would be nice on MT Gox to be able to create Stop/Stop Limit Orders.

Kind of limited trading right now with just market/limit orders.

There is a screen in this thread.

[RyNinDaCleM]

Would be nice on MT Gox to be able to create Stop/Stop Limit Orders.

This...At LEAST would be awesome!

[StewartJ]

Would be nice on MT Gox to be able to create Stop/Stop Limit Orders.

This...At LEAST would be awesome!

Why cant they get this done?  Campbx has it in place.

[tvbcof]

Jered mentioned that TradeHill had this in the works at Google last week.

As I recall, he or someone at Tradehill had mentioned it as a possibility a long time ago, but also that they were some distance away from it and that it would require careful studies by proficient actuaries.  It's probably on that intro thread of there's (but I'm to lazy to look.)

From my perspective, I would shy away from an exchange who also did leveraged futures-type operations, and vice-versa.  I see more bad reasons than good ones to double-duty these two functions, and as a customer who had choices, I would almost certainly do these two types of trading with different houses.

---

On a different tangent, Joel, do you remember the guy who mentioned that 'merged mining' could be an alternative to extensions (and further script complexity and what-not) in the basic Bitcoin solution?  Or is that individual reading this note?

Unfortunately the discussion on this was brief, but it sounded to me like he was considering entirely independent block chains (possibly) backed by BTC.  Such a solution has great appeal to me since it seems to me that it would both strengthen and simplify Bitcoin proper while providing enhancements which could be of significant value.  (Another of these I though of, in addition to a 'decaying claw-back potential', was a built-in voting system where holders of the currency could vote on monetary policy with the results being tamper-proof.)

[Dan The Man]

I would like to see some kind of individual exchange based leverage system. Basically any user can put out an open offer to lend out a certain amount of dollars or bitcoin with a certain amount of percent interest and a certain minimum net value before liquidation. Then Mt Gox does all of the work of putting users together and consolidating these loans so that any user can short or trade on margin without having to borrow Mt Gox's capital.

[JoelKatz]

Jered mentioned that TradeHill had this in the works at Google last week.

Jered was at Google?

The Silicon Valley Bitcoin meetup was held at Google HQ last week with guest Gavin Andresen. Jered was there.
http://www.meetup.com/Silicon-Valley-Bitcoin-Users/

[JoelKatz]

On a different tangent, Joel, do you remember the guy who mentioned that 'merged mining' could be an alternative to extensions (and further script complexity and what-not) in the basic Bitcoin solution?  Or is that individual reading this note?

I got the impression that he didn't have a full understanding of what merged mining actually is. But it's also possible he's thinking of something that hasn't occurred to me.

Unfortunately the discussion on this was brief, but it sounded to me like he was considering entirely independent block chains (possibly) backed by BTC. Such a solution has great appeal to me since it seems to me that it would both strengthen and simplify Bitcoin proper while providing enhancements which could be of significant value.  (Another of these I though of, in addition to a 'decaying claw-back potential', was a built-in voting system where holders of the currency could vote on monetary policy with the results being tamper-proof.)

If you could pull Bitcoins out of the main block chain and then somehow get them back in again, that would make all kinds of things possible. I'm not sure I see the connection to merged mining, other than that could mean that you could easily have "side chains" that were about as secure as the main chain.

[tvbcof]

Unfortunately the discussion on this was brief, but it sounded to me like he was considering entirely independent block chains (possibly) backed by BTC. Such a solution has great appeal to me since it seems to me that it would both strengthen and simplify Bitcoin proper while providing enhancements which could be of significant value.  (Another of these I though of, in addition to a 'decaying claw-back potential', was a built-in voting system where holders of the currency could vote on monetary policy with the results being tamper-proof.)

If you could pull Bitcoins out of the main block chain and then somehow get them back in again, that would make all kinds of things possible. I'm not sure I see the connection to merged mining, other than that could mean that you could easily have "side chains" that were about as secure as the main chain.

My conception is completely independant chains.  Informally (from the standpoint of Bitcoin) BTC value would be pledged to an alternate chain.  The alternate chain could verify the pledge in order to valitate it's own value, but Bitcoin proper would not know or care about it at all.

What I would hope would happen would be that a holder of Bitcoin would volentarily support alternate chains of their choice (plegde and not retract BTC), and probably in part because they wish to utilize value on one alternate chain or another.  A very big part of why such a scheme appeals to me is that it might allow Bitcoin to scale to support economies which are at best cumbersome to support with Bitcoin proper.  And, as I say, provide a better solution for a given marketplace.

The nicety of merged mining to me (and in my understanding of the term) would be that one need not choose between supporting Bitcoin or some other chain.  The overhead of supporting many would not be cost linear.

[Dan The Man]

The only way I can see to "pledge" a bitcoin to an alternate chain, would be to send it to a known invalid address, thus destroying it publically.

[tvbcof]

The only way I can see to "pledge" a bitcoin to an alternate chain, would be to send it to a known invalid address, thus destroying it publically.

By 'pledge' I mean simply leaving a certain BTC value associated with a certain key-pair (for instance.)  As long as that remains the case, the value is 'pledged'.

A key element of my vision here would be that BTC backers would not wish to destroy the alternate (break their pledge) because they are receiving some benefit and/or it is cumbersome or costly to do.  Nor would the backers want it to be destroyed so the alternate would be designed such that users would elect to use it over other alternatives.  This provides an engine driving evolution toward currency solutions which work best for everyone.

Now there are a lot of questions in the design of an alternate chain not the least of them being how and if to arrange convertibility to BTC, and there are a range of possibilities here.  Again, though, I envision them having no impact on Bitcoin itself.