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ptshamrock (OP)
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January 20, 2012, 02:57:03 PM
 #1
Can somebody explain to me how SR or other sites which offer hedging do that in practice?
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There are several different types of Bitcoin clients. The most secure are full nodes like Bitcoin Core, which will follow the rules of the network no matter what miners do. Even if every miner decided to create 1000 bitcoins per block, full nodes would stick to the rules and reject those blocks.
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January 20, 2012, 03:02:47 PM
 #2
They likely just trade the escrowed coins to USD, then trade back to BTC for delivery when the buyer releases the funds.

They could also sell short on Bitcoinica, but selling the escrowed funds directly is probably cheaper and easier.
 
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ptshamrock (OP)
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January 20, 2012, 04:41:32 PM
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but i assume they do that manualy..could there be a way to automatize this?
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January 20, 2012, 04:49:00 PM
 #4
It's easy to automate.  All the major exchanges have a simple API to transfer funds in and out and perform the trades.

For example, mtgox: https://en.bitcoin.it/wiki/MtGox/API
 
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February 29, 2012, 11:04:06 AM
 #5
Probably worth giving options a look.
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