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weirdgod
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May 18, 2014, 07:57:49 AM
 #1

I own some bitcoins, but I have upcoming expenses, so it seems I would need to sell them shortly...

But, at the same time, I am bullish on bitcoin, so I am sure, I will buy them back in lets say 4-6 months when I raise enough cash back.
Since I am speculating that btcusd will go up soon, what I would really like to do is guarantee myself same price to buy them at later.
The best vehicle that I know of to give me that, are options (perfect would be "JAN'15 CALL option @ $450/BTC"). I would be willing to pay a premium for such a contract...

I've been looking around, but no exchange/broker (not even ones wo/ reputation) is offering bitcoin options.
Have I missed anything? Any ideas how to do this alternatively? I've seen some "futures" contract sites like https://icbit.se/ and bitfinex, but I dont understand them completely, and I am not sure whether they offer a "product" that would help my situation... Ideas?

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amihh
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May 18, 2014, 08:55:51 AM
 #2

Unfortunately there are no plain vanilla options on cryptos at the moment.

Perhaps you can find a partner for this deal without an exchange.

Post more info here. E.g. how many bitcoins would you like to secure?
What is the premium you're willing to offer the contract writer?
You need to find someone with enough bitcoins to write a covered call option and the seller will probably be less bullish than you on the price of BTC/USD on Jan 2015.


I'm not sure but I think Mastercoin mentioned they could enable such contracts on their platform but I havent seen any concrete evidence for that.
weirdgod
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May 18, 2014, 09:51:13 AM
 #3

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

Smiley And info on which platform we could reliably actualize this deal. I would imagine interested party would have to transfer his 100 btc to mutually agreed upon escrow person for the duration of the option.

I would like this to be US style option - meaning i can execute it anytime before expiry date.

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May 18, 2014, 04:05:41 PM
 #4

Didn't Bitcoinica offer options before?
davidgdg
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May 21, 2014, 09:24:42 PM
 #5

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

Smiley And info on which platform we could reliably actualize this deal. I would imagine interested party would have to transfer his 100 btc to mutually agreed upon escrow person for the duration of the option.

I would like this to be US style option - meaning i can execute it anytime before expiry date.


Nobody in their right mind would write this. It's a virtually guaranteed losing bet. To have any chance of any interest I think you would need to be looking at a strike price of well over $1000 (and even that wouldn't be cheap, given BTC's volatility).
You're right though. There is definitely a market for BTC options.

"There is only one thing that is seriously morally wrong with the world, and that is politics. By 'politics' I mean all that, and only what, involves the State." Jan Lester "Escape from Leviathan"
madken7777
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May 21, 2014, 11:07:43 PM
 #6

Will be hard to find a counter party for high volatility instrument.
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May 22, 2014, 09:20:33 PM
 #7

Great conceptually but won't be easy to find someone to do this..
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May 23, 2014, 01:25:34 AM
 #8

Close to 100 usd jump in 1 week.

Option writers will get slaughtered in environment like this.
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May 23, 2014, 03:08:13 AM
 #9

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

Smiley And info on which platform we could reliably actualize this deal. I would imagine interested party would have to transfer his 100 btc to mutually agreed upon escrow person for the duration of the option.

I would like this to be US style option - meaning i can execute it anytime before expiry date.



There is icbit.se

The problems with bitcoin options


* Liquidity.

* Difficulty in pricing.

* You need a trusted third party ("counterparty"). In the bitcoin world - where exchanges go under regularly - I believe that can be pretty hard to find.

* Regulations.

I think mainly though it's a problem with liquidity. There is icbit.se already, but most of the derivatives there are thinly traded. Once the spread gets beyond a certain point, it doesn't really work..

PS.

I dont see "nobody would write it" as a valid reason why , for example, a CALL option does not exist. I'm sure *somebody* would, it just would depend on the price.
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May 23, 2014, 09:54:07 AM
 #10

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

Smiley And info on which platform we could reliably actualize this deal. I would imagine interested party would have to transfer his 100 btc to mutually agreed upon escrow person for the duration of the option.

I would like this to be US style option - meaning i can execute it anytime before expiry date.


PS.

I dont see "nobody would write it" as a valid reason why , for example, a CALL option does not exist. I'm sure *somebody* would, it just would depend on the price.

Technically this is of course true.  The question is whether anybody would write on the OP's terms except for an enormous premium, which would defeat the OP's object of low-cost hedging.

Interestingly, though, the price for a Dec 14 Gold Call Option is only US$ 13 an oz - i.e. about 1% of the underlying future.  A lot cheaper than I thought it would be. Gold is of course much less volatile than BTC, but that might suggest that the equivalent BTC option should not be more than 10% of the underlying - i.e. ~ 10BTC. I'm not sure I'd tie up 100 BTC on those terms though.

"There is only one thing that is seriously morally wrong with the world, and that is politics. By 'politics' I mean all that, and only what, involves the State." Jan Lester "Escape from Leviathan"
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May 23, 2014, 07:16:15 PM
 #11

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

Smiley And info on which platform we could reliably actualize this deal. I would imagine interested party would have to transfer his 100 btc to mutually agreed upon escrow person for the duration of the option.

I would like this to be US style option - meaning i can execute it anytime before expiry date.


PS.

I dont see "nobody would write it" as a valid reason why , for example, a CALL option does not exist. I'm sure *somebody* would, it just would depend on the price.

Technically this is of course true.  The question is whether anybody would write on the OP's terms except for an enormous premium, which would defeat the OP's object of low-cost hedging.

Interestingly, though, the price for a Dec 14 Gold Call Option is only US$ 13 an oz - i.e. about 1% of the underlying future.  A lot cheaper than I thought it would be. Gold is of course much less volatile than BTC, but that might suggest that the equivalent BTC option should not be more than 10% of the underlying - i.e. ~ 10BTC. I'm not sure I'd tie up 100 BTC on those terms though.

The price moves more than 20% this week alone. Not sure how would someone price the premium.

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May 24, 2014, 07:00:58 AM
 #12

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

Smiley And info on which platform we could reliably actualize this deal. I would imagine interested party would have to transfer his 100 btc to mutually agreed upon escrow person for the duration of the option.

I would like this to be US style option - meaning i can execute it anytime before expiry date.


Yes you can buy a future, or some kind of it, because in 4-6 months bitcoin can wroth 5,000 each one, and you will miss the train

 Grin
neighborrr
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May 27, 2014, 02:17:08 PM
 #13

Why there are still no plain vanilla options on cryptos?  Sad
davidgdg
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May 28, 2014, 08:46:14 AM
 #14

Why there are still no plain vanilla options on cryptos?  Sad

I've just seen this https://atlasats.com/optionsguide (via Jon Matonis's article at Coindesk)
Not sure if they are trading yet though.

"There is only one thing that is seriously morally wrong with the world, and that is politics. By 'politics' I mean all that, and only what, involves the State." Jan Lester "Escape from Leviathan"
wangxinxi
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June 06, 2014, 10:27:32 AM
 #15

I am actually building a vanilla option trading platform. Do you have any idea about the regulation stuff? Is there any way to bypass regulation?
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June 06, 2014, 07:40:06 PM
 #16

I am actually offering options that are backed by deposit at an escrow.

But the option you are proposing would be ridiculous expensive.

mysidia
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June 09, 2014, 06:29:25 AM
 #17

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

A CALL for that amount expiring today would have approximately 100 * (650-500) = $15,000 in intrinsic value.    Add 205 days of time value premium, where historically the underlier has ranged from $400 to $1000 over a similar period of time, a standard deviation of ~50% of log returns.
 
And we can estimate that today this Call option is worth a total of approximately $60,000,   but  any writer in their correct mind,  would  need to add on a charge of 5 to 10%,  in order to expect a profit.

BTC: 1FbuJxZCeJUqrP7EpUkgMKWAmAA1M8gUBd
LTC: LbvomgbwKnqk47mWzALCDEoV8ydjxYYYpF
ShakyhandsBTCer
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June 15, 2014, 11:23:35 PM
 #18

I would be interested in buying 1 CALL contract (covering 100 BTC) at DEC 31 2014 expiry with strike price $500.
Accepting offers.

A CALL for that amount expiring today would have approximately 100 * (650-500) = $15,000 in intrinsic value.    Add 205 days of time value premium, where historically the underlier has ranged from $400 to $1000 over a similar period of time, a standard deviation of ~50% of log returns.
 
And we can estimate that today this Call option is worth a total of approximately $60,000,   but  any writer in their correct mind,  would  need to add on a charge of 5 to 10%,  in order to expect a profit.

You need to have a liquid options market for options trading to really be effective. With enough buyers/sellers in a market then individual participants will have their own motives (speculation, hedging) that can help set prices.
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October 07, 2014, 09:44:47 AM
 #19

Guys, I just built a platform for you to exchange options: https://coinut.com. To ensure the fairness of the platform, we strictly disallow any members in the company to participate in any trading activities using this platform. Our profit comes from commissions only.
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