August 2012 Results :
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Operational results, MPOE
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Overall trade 75`648 contracts, of which -12`312 +7`100 CALL ; -32`472 +23`764 PUT.¹
Revenue : 10`110.90263456 BTC, of which :
*contract sales : 10`016.30636953 BTC
*contract exercise : 94.59626503 BTC
Expenditure : 14`651.324164215 BTC, of which :
*contracts bought : 11`562.32029052 BTC
*exercise : 2`622.33420727 BTC
*capital expenses : 466.66966642 BTC (9`333.58 × 4.9999%)
Loss : -4`540.42152965 BTC
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Operational results, MPEx
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Overall trade : 155`832.72262277 BTC, of which :
*Revenue from sales fee : 309.03038447 BTC (154`515.19223830 BTC total trade volume)
*Revenue from new accounts : 940 BTC²
*Revenue from consultancy and other services : 68.50 BTC
Expenditure (CSR) : 10 BTC³
Profit : 1`307.53038447 BTC
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Shareholders table
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Total shares : 1`000`000`000, of which :
1. Mircea Popescu : 980`770`396 shares,
2. MPOE.ETF : 4`077`552 shares,
3. Others : 15`152`052 shares.
Total dividend : 1`239.03038447 BTC.
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Bondholders table
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Total capital : 9`333.58 BTC, of which :
1. 1HLWcPokYJixh6BsJH9JWa8MzDaGSLGDds, 94.53038499 BTC @ 4.9999%
2. 1NcrEUkRzqQaAEGabZKPTZhArzhJvYNGWh, 94.53038499 BTC @ 4.9999%
3. 1CkEwsGgZ9saNRmr5FnbtYJjnLBdgGpS7J, 94.53038499 BTC @ 4.9999%
4. 1J9AN7LiDNDUfzAwk8D3uBLT5diWHFFCh5, 945.30377439 BTC @ 4.9999%
5. 1swAzHw1zTWqoi5184VinvUxLWnBskPVW, 1918.33834257 BTC @ 4.9999%
6. 1Efr7txsbxMu2U5oTnFu4tDHVbVPvRAyBT, 1400.00000888 BTC @ 4.9999%
7. 1A2hqHVSUERAT3t1yJ7ggYCQccvH6pZGZm, 2900.00000888 BTC @ 4.9999%
8. 1D7YtrxnyK3ug3Rvp9jX66T8kVzWww9Jr8, 1886.34671031 BTC @ 4.9999%
To cover : 4`540.42152965 BTC
Loss per BTC : 0.48646087.
MPBOR valid 1 through 28 September : 4.9999%.
Final bondholder list :
1. 1HLWcPokYJixh6BsJH9JWa8MzDaGSLGDds, 48.54505081 BTC
2. 1NcrEUkRzqQaAEGabZKPTZhArzhJvYNGWh, 48.54505081 BTC
3. 1CkEwsGgZ9saNRmr5FnbtYJjnLBdgGpS7J, 48.54505081 BTC
4. 1J9AN7LiDNDUfzAwk8D3uBLT5diWHFFCh5, 485.45046937 BTC
5. 1swAzHw1zTWqoi5184VinvUxLWnBskPVW, 985.14178622 BTC @ 4.975%
6. 1A2hqHVSUERAT3t1yJ7ggYCQccvH6pZGZm, 432.67672807 BTC @ 4.99%
7. 1Efr7txsbxMu2U5oTnFu4tDHVbVPvRAyBT, 718.95477396 BTC @ 4.9999%
8. 1A2hqHVSUERAT3t1yJ7ggYCQccvH6pZGZm, 1489.26345546 BTC @ 4.9999%
9. 1D7YtrxnyK3ug3Rvp9jX66T8kVzWww9Jr8, 968.71283151 BTC @ 4.9999%
10. Mircea Popescu (creditor of last resort)
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Miscellaneous
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I. MPOE suffered what might very well be insider trading.
A good amount of CALLs were bought in July (over 1k), added to which a good amount bought since (over 2k) as well as a good amount of in the money PUTs were sold short (P180T, P190T, P200T, in total over 5k). The CALLs were executed shortly before the closure announcement of Bitcoin Savings and Trust. The PUTs were rebought on the market soon after the announcement, purchases continuing to the reversal of the position (the bot went from +5k to -5k on its book on those three MPSICs). The total losses resulting from these operations are roughly 4`500 BTC, which pretty much cover the month’s poor results.
It’s unclear to me what would be the appropiate steps, either to establish the truth on the matter (the suspicion might in fact be unwarranted) or to guard against similar occurences in the future. It seems to me improbable that the preventing of market manipulation can be accomplished by one Mircea Popescu, or even by any one entity in a market made out of pseudonymous or anonymous participants. There’s the possibly reasonable hope that as the market matures such movements become impossible, especially as the various amateurs with pretention of “knowing finance” who are capable of throwing hundreds of thousands of BTCs into pyramid schemes smarten up or go bankrupt.
While painful, the current month is also replete with records, and rather plainly demonstrates the are the limits of exposure for MPOE financing bonds. In July, a month during which BTC went pretty much linearly from ~6.5 to ~9.5 (+46%) MPOE stayed above water, realising net profits of ~870 BTC. In August, during which BTC went from ~9.5 to ~15.5 (+63%) and then back to ~10.5 (-32%) MPOE suffered losses equal to approximately half its trading capital (as computed by the new rules, introduced back in April), thus confirming the evaluations made at the begining of the year with regards to the worst case scenario.
II. MPEx proved its value this month - it is the first time since it was acquired that it generates larger revenue than MPOE. A significant group of newly registered users (especially significant with regards to their activity, this metric nearly doubling the current month) as well as the sales volume increase brought significant sums to investors.
Considering that the main competitor managed a total volume since its launch (in January) of approximately 250`000 BTC (roughly 30k a month) while MPEx has had transactions well in excess of 150`000 BTC this month alone we can conclude that MPEx currently holds a large majority of the BTC denominated financial instruments market.
It’s to be expected we find ourselves at a point of inflection. The low transaction costs, the significant volume, notable security, speed and availability advantages, various other strong points (free transfers, margin etc) are likely to convince pretty much all investors to open accounts in the coming months. As such we expect increasing revenue for the future.
III. F.PURE.SYNTH is withdrawn due to lack of interest shown by investors. All outstanding shares were rebought, the current float being 0.
IV. In April MPEx announced that it was looking for a market-maker for either options or futures based on difficulty. The third party selected to fulfill this role has offered options according to the specifications laid out then, without interruption until today.
Unfortunately, a string of losing transactions in the current month put that third party in the position of not being able to continue offering these options in the future. All holders have received their due BTC, but starting with September O.HASH will no longer be available on MPEx.
We are open to bringing this or a similar product back to the market, with the caveat that the correct valuation thereof has proven in practice to be more difficult than it seemed in theory.
V. To allow for a fairer pricing of risk, starting in September the limit on bonds interest is lifted (it was 2% at launch and then 5% starting in May).
Mircea Popescu will continue to supplement any capital shortfall, at an interest equal to the last bond but not less than the MPBOR for the previous month.
Due to this modification, all investors are given a two day grace period (until 23:59:59 GMT on the 2nd of September), during which they can withdraw or add new sums which will be considered for the current month (September).
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1) Contracts traded between third parties without MPOE's participation reached significant volume this month for the first time (10`628 O.BTCUSD.P190T and 17300 O.BTCUSD.P200N). This means the total number of traded contracts on MPEx during August was a record 103`576.
2) About a third of new registrations this month took place after the announcement of the S.DICE IPO.
3) 5 BTC to the Open Transactions project, 5 BTC to Azelphur to encourage quote stream bot development.
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