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Author Topic: Exchange trading rules questionnaire  (Read 1238 times)
AndrewBuck
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April 25, 2011, 10:54:23 PM
 #1

I think it would be good to have a discussion regarding the rules surrounding how bid/ask orders are placed and the rules used to fill them.  By trading rules I mean things like: minimum size orders for placing orders, minimum tick size in terms of price per bitcoin, etc.  It would also be nice to establish what the various rules are for each exchange and how they resolve issues like what price does an order settle at if the matching bid/ask offer being used to settle it are for different amounts.  I think a good way to start this discussion, as well as to improve the overall confidence in the exchanges themselves, would to put together a standard list of "questions" about how the exchange works.  Each exchange owner can then answer the questions and post their responses somewhere on their exchange.  This will allow users of the markets to make better choices about which market would best fulfill their needs, as well as increasing their confidence in the safety and stability of the markets themselves by letting them know the exact rules by which that particular market is governed.

Note that I do not intend for this to be a discussion about what rules any particular market should abide by, this is intended to be solely about what kinds rules the market should have have a stated position on.  To give an example of what I mean, one rule is regarding the minimum tick size for pricing.  I do not want this to be a thread about whether there should or should not be a minimum tick size on any or all of the markets, but rather, is this a rule that a market should have a stated position on: even if that position is that for their market there will be no minimum tick size.

Hopefully after a bit of discussion we can come up with a good list that each market will then be able to respond to on their market's rules or help pages.  To get us started I have tried to compile a good list of questions that the more established markets tend to have rules about (NYSE, NASDAQ, LSE, etc).  There are probably many other questions that the various markets should have a stated position on.  If you come up with other questions you would like to see added to the list post them below and I will try to include them in the main list so it is easy for the exchange operators to respond to.

-Buck



-  Is there a minimum size for bid/ask offers to the market?  If there is, is the minimum size determined by the number of BTC or the other currency involved in the offer?

-  Is there a maximum size for bid/ask offers, and if so what currencies form the basis for the limit?

-  Is there a maximum outstanding position limit? For example, regardless of whether there are limits on the size of an individual offers, is there a maximum number of bitcoins that can be put up for sale (or for bid) by a single trader at one time?

-  Are there daily per trader volume limits?  For example, can a single trader sell 1 million BTC in one trading day, or are they limited to some maximum volume per day?  Is this volume a separate limit on buying/selling or is it a limit on the sum total of the trading activity?

-  Is there a minimum price tick?  By this I mean, what is the finest precision that is allowed for the rate of bitcoins to other currency; i.e. if there are standing orders at $1/BTC can a new offer be placed at $1.000000001/BTC?

-  Are all currently outstanding bid/ask offers shown?  If some are not made public, what criteria is used to determine which offers are public and which are hidden?  For example, do the publicly available data feeds include very very low/high offers, or are only the first so many in each direction shown?

-  If some offers are not shown on the public boards, who (if anybody) has access to the full list of offers?

-  Are there any fees for entering bid/ask offers, or are there trading fees assessed on successful trades?

-  Are there fees on deposits/withdrawal of bitcoins or other currencies?

-  Is there a daily limit on deposit/withdrawal of funds to trading accounts?

-  How long do deposits/withdrawals take before they post to the account?

-  How are differences in matching bid ask offer prices resolved?  For example if Alice puts up 50 bitcoins for sale at $1.00/BTC and Bob puts in a buy offer of $1.10/BTC, at what price will the deal close?  Does the deal always get closed on the lower, or the higher amount, halfway in between, at the price of the first person to post their offer?

-  Is trading by bots allowed on the market?

-  Whether you allow bot trading or not, is there a mechanism by which machine readable market data is made available and is there a way for bid/ask offers to be posted or canceled other than through the standard web interface?

-  Is historical data on the closing trades available, and to whom is it available?  Is the full historical data of all bid/ask offers made available even if the offers did not fill, is this data even stored at all?

-  Are there minimum or maximum times that bid/ask offers are valid for?  For example, can an offer be made and then canceled immediately, or must it remain on the market for at least some length of time?  Is there a maximum lifetime for offers or will old offers be removed from the market by the operator?

-  What are the opening/closing hours of trading on the market (and what timezone is used for this)?

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April 26, 2011, 02:09:29 AM
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I am definitely interested in answers to all those questions from each of the exchanges. I could probably answer half of them for MtGox from my experiences, but it would be best if MagicalTux could give authoritative answers. I look forward to answers from the other exchanges as well.

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April 26, 2011, 02:32:53 AM
 #3

So here are some replies for MtGox. I guess we need a more elaborate FAQ on the site (or at least have someone put those on the MtGox wiki page on en.bitcoin.it).

  • Is there a minimum size for bid/ask offers to the market?  If there is, is the minimum size determined by the number of BTC or the other currency involved in the offer?
Yes, minimum size is currently 1 BTC (it was 10BTC a while ago, but with the increased value it has been recently put at 1 BTC)

  • Is there a maximum size for bid/ask offers, and if so what currencies form the basis for the limit?
None other than the amount you have deposited.

  • Is there a maximum outstanding position limit? For example, regardless of whether there are limits on the size of an individual offers, is there a maximum number of bitcoins that can be put up for sale (or for bid) by a single trader at one time?
None.

  • Are there daily per trader volume limits?  For example, can a single trader sell 1 million BTC in one trading day, or are they limited to some maximum volume per day?  Is this volume a separate limit on buying/selling or is it a limit on the sum total of the trading activity?
None.

  • Is there a minimum price tick?  By this I mean, what is the finest precision that is allowed for the rate of bitcoins to other currency; i.e. if there are standing orders at $1/BTC can a new offer be placed at $1.000000001/BTC?
There is a rounding at 5 decimals, however it seems to not be present in some parts. On the new system (in one~two weeks) it will be properly enforced.

  • Are all currently outstanding bid/ask offers shown?  If some are not made public, what criteria is used to determine which offers are public and which are hidden?  For example, do the publicly available data feeds include very very low/high offers, or are only the first so many in each direction shown?
The depth of market contains trades around the price of the last trade. It is about 1/3rd asks, 2/3rd bids (not exactly, I'll let you compute the exact numbers to see what you come up with). Other orders are made private on request of the requestor (dark orders).

  • If some offers are not shown on the public boards, who (if anybody) has access to the full list of offers?
Only the staff intern to MTGox, who is forbidden to provide any information to anyone outside.

  • Are there any fees for entering bid/ask offers, or are there trading fees assessed on successful trades?
Trading fees are only collected on successful trades.

  • Are there fees on deposits/withdrawal of bitcoins or other currencies?
It depends on the deposit/withdrawal method. There is no fee for bitcoins, and usually we try to make deposits free.

  • Is there a daily limit on deposit/withdrawal of funds to trading accounts?
No limit on deposits, however we limit withdrawal to $1000/day (or equivalent). You can request more, and we might require extra informations to make sure you are indeed you (and not some hacker who gained access to your account) and/or fill customs declarations if funds are going overseas.

  • How long do deposits/withdrawals take before they post to the account?
Bitcoins require 6 confirmations. Other type of deposits/withdrawals depend on the method (LR is usually instant, except when their API has problems. Euro deposits are handled when banks are not on holidays, twice a day. US ACH/wire and JPY deposits are handled during business hours).

  • How are differences in matching bid ask offer prices resolved?  For example if Alice puts up 50 bitcoins for sale at $1.00/BTC and Bob puts in a buy offer of $1.10/BTC, at what price will the deal close?  Does the deal always get closed on the lower, or the higher amount, halfway in between, at the price of the first person to post their offer?
The deal closes on the earlier order. If Bob's offer is put when Alice's offer is already posted, it'll be resolved at Alice's price.

  • Is trading by bots allowed on the market?
There is an API that can be used by bots. There is currently no specific rules for bots (except "avoid killing the server"), however depending on the situation additionnal rules may be added.

  • Whether you allow bot trading or not, is there a mechanism by which machine readable market data is made available and is there a way for bid/ask offers to be posted or canceled other than through the standard web interface?
Yes, you may want to consult the API pages and look at how the mtgox.com webpage generate their graphs (data is pulled out in json format).

  • Is historical data on the closing trades available, and to whom is it available?  Is the full historical data of all bid/ask offers made available even if the offers did not fill, is this data even stored at all?
It is not currently available from mtgox, however some users are known to have collected those for some time and made them available. Bid/asks data is not kept if the owner cancelled it (if not, the bid/ask will continue existing until someone fills it).

  • Are there minimum or maximum times that bid/ask offers are valid for?  For example, can an offer be made and then canceled immediately, or must it remain on the market for at least some length of time?  Is there a maximum lifetime for offers or will old offers be removed from the market by the operator?
There is no minimum (ie. you can cancel a bid/ask immediatly). There is no maximum either at this time (we might have to set one if this makes the database too big).

  • What are the opening/closing hours of trading on the market (and what timezone is used for this)?
The market is open 24/24, however we stop the day at 0:00 GMT for statistical purposes (ie the - currently broken - all time graph)[/list]

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