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Author Topic: A guide to GLBSE-ETFs  (Read 2012 times)
2weiX
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March 20, 2012, 09:07:24 AM
 #21

I do read the 2.0-thread from time to time and even tinkered with the GLBSE2 for a day - just do NOT have the time to commit.

I'd be more than happy to lay out how it "should be", though.
This thread is here for exactly that - figuring out how ETFs work and how they should work on GLBSE.

I appreciate your comments, (re)read them carefully and reflect on them.
From my point of view it is already as good as it can get (reading your posts, from an expert voicing the "shoulds")
 and as my understanding will solidify I would like draft summaries and recommendations in the IT lingo for development
 and hope they will make it on the development roadmap. if accepted for development, write test cases and see how it goes from there

with the 2.0 being out 'any day soon' and only a finite number of important & missing stuff & promised new features that need to be developed ... one day requests from the community may be taken into account. while waiting for that to happen I can commit myself to closely watch glbse related threads (and poke nefario).

alles gute!


I do have some CS background, so if you would like to translate the "shoulds" into dev-lingo, I'd be thrilled to read them and make comments.


there are also some practical questions, such as:
question is: should the ETF pricing be derived from the aggregated underlying bid/ask?
should the pricing be done by the issuer or from GLBSE ? etc etc
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mila
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March 20, 2012, 12:04:13 PM
 #22

... and as my understanding will solidify I would like draft summaries and recommendations in the IT lingo for development
... I can commit myself to closely watch glbse related threads ...

thus said ^^

I do have some CS background, so if you would like to translate the "shoulds" into dev-lingo, I'd be thrilled to read them and make comments.

that's my plan. to check with you if the change requests (feature requests) make sense and add to the usability of glbse for ETF

there are also some practical questions, such as:
question is: should the ETF pricing be derived from the aggregated underlying bid/ask?
should the pricing be done by the issuer or from GLBSE ? etc etc

as long ETF is a standard asset with generic buy/sell orders (and nothing else), GLBSE has no tools or rules how it could influence the pricing (it is the responsibility of the asset manager and his ability to react accordingly on market moves).
I have only a basic understanding (imagination) how pricing derived from bid/ask could be dome. such option would simplify the "minute to minute" operations right there at the server side without the need to develop a bot. it makes sense as well to leave this repetitive and error prone task to a computer. my first thought was a but ... the price would be then 'free floating' subject to all (also to sudden) swings in supply/demand and price changes. pricing by glbse would require new types of asset where the issuer would agree to that and the rules would be well known and properly supported by the software.

is not glbse too small for that yet anyway? moving prices with control of let's say 20-40% shares in 2/5 of constituents should be easy, especially if bot would react in real time and could be trapped in a position that triggers asset sell off (note to myself, thing of built in limits, conditions to check for, border conditions and user/issuer preferences p.ex.)

if nothing would change, ETF manager would be as any other asset manager, manually creating orders, by your previous note closer to managed fund than ETF and deviate from constant ratio of all constituents at all times (p.ex. great differences in price per stock, up to 15x cheaper/more expensive shares of mining companies exist. sales of the expensive stuff would occur only 1 in 15 times where the cheaper asset should be sold.)

assuming trading volume will not burst and spreads would be reasonable, how the aggregate pricing formula would look like in real world exchange, please?

your ad here:
2weiX
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March 20, 2012, 02:21:40 PM
 #23

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in GLBSE1.0 you can "recall" shares, that is you can remove from circulation any number of shares you have in your own account.

This functionality is only available on the command line client.

In 2.0 that functionality is already 1/2 there but hasn't been tied into the system yet, so it's something that will be added shortly after launch.

Is this what you mean?

Nefario.

so, we're half way there already :-D
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March 20, 2012, 04:08:46 PM
 #24

I like ETFs

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