[XMR] Monero Speculation

[americanpegasus]

So I have a few thousand XMR I am thinking about lending out on Polo.  
  
I understand the risk is pretty low for a fairly guaranteed return.  What rate do you think I should lend out at?  I'm still a little confused on how the lending rates work.

Jesse Livermore would often "chase a rising price" - but I think he would consider it more of a case of accumulating a position when a commodity was undervalued, and then adding to that position as it recovered in order to force overcompensation.

 He did make a point of mentioning multiple times that exiting such a position can be quite tricky... But if you expect the commodity in question to be a unit of account in the future, exiting your position might not be a concern.

 
  
God I love that man.  What a legend.  That reminds me it's about that time of year again to go read his memoirs.  
  
Also, I think the fact that people technically never have to exit a crypto position is a massive, massively underestimated advantage to crypocurrency speculation/investing.  With stocks, you always have to exit at some point - right?  But this is one reason Berkshire shares soared ever higher over the years: superior management combined with never having to exit.  
  
This is a lifetime logarithmic price chart of $BRK.  It could very easily become a lifetime price chart for Monero or Bitcoin.  
  

[medusa13]

So I have a few thousand XMR I am thinking about lending out on Polo.  
  
I understand the risk is pretty low for a fairly guaranteed return.  What rate do you think I should lend out at?  I'm still a little confused on how the lending rates work.

i can not tell you what rate to lend out that coins. the rate you set is per 24 hours, but it gets deducted hourly or maybe even lower timeframes (i am not sure!)

so if a shorter gets 1000 coins from you for 0.5%, but after 2 hours he decides it was not such a good idea and returns the coins to you without doing a trade -> you will still get some, but not the 0.5 %

in my opinions its not worth it, but a lending market should develop, so do what you feel is best.



maybe TC can tell us all about it, he seems to know best.. 

[smooth]

So I have a few thousand XMR I am thinking about lending out on Polo.  
  
I understand the risk is pretty low for a fairly guaranteed return.  What rate do you think I should lend out at?  I'm still a little confused on how the lending rates work.

The risk is that in an explosive price increase short sellers make take so much of a loss that they can't pay back the loan despite margin requirements and forced liquidation, and you will lose principal. That and (compared to keeping coins in your own wallet) the risk getting Goxed. I'll let you decide for yourself whether or when that is a good deal.

As far as the mechanics of how the loans work medusa13 had it right. You set the rate (daily) and the maximum term (2-60 days). If someone borrows from you they can pay back early. Otherwise you continue to get the agreed rate of interest credited to your account quite often (every minute or few minutes).

No one can tell you what rate to set, since it depends entirely on market conditions. Sometimes even 0.0002% may not ever get taken by a borrower. Other times it can be 1% or higher.

[canth]

shit bounced from 177 to 188 while i awaited confirmation and just looked and it's up again! dammit I need moar cheap!!!!

Alright, cringe, I had about 10 bitcoins sitting in Coinbase collecting dust and this Monero rise has caused me to move them into the circle.  Let's dance with some dragons. 
 
So i just picked up 4,000 more XMR (from that tasty 60 Bitcoin sell wall), fully expecting to get reamed and watch the price drop back to 110,000.  I know i'm not supposed to chase a rising price, but I figure if there was ever an asset to chase, XMR would be the one to do it. 

I went with a bit of the opposite. I'm a bit overweight with XMR, so I took 10% off the top, sold and put buy orders for some lower prices. XMR goes up awesome. XMR goes down, i'll buy back in.

[iCEBREAKER]

So I have a few thousand XMR I am thinking about lending out on Polo. 
 
I understand the risk is pretty low for a fairly guaranteed return.  What rate do you think I should lend out at?  I'm still a little confused on how the lending rates work.

The risk is that in an explosive price increase short sellers make take so much of a loss that they can't pay back the loan and you will lose principal. That and (compared to keeping coins in your own wallet) the risk getting Goxed. I'll let you decide for yourself whether or when that is a good deal.

As far as the mechanics of how the loans work medusa13 had it right. You set the rate (daily) and the maximum term (2-60 days). If someone borrows from you they can pay back early. Otherwise you continue to get the agreed rate of interest credited to your account quite often (every minute or few minutes).

No one can tell you what rate to set, since it depends entirely on market conditions. Sometimes even 0.0002% may not ever get taken by a borrower. Other times it can be 1% or higher.

People devote entire careers and dedicate supercomputers to the voodoo magic of option pricing.

If you enjoy solving Navier–Stokes equations in your head, you might be able to create a better optimization of the Black–Scholes model than the rest of the market

Here's where to start:  https://en.wikipedia.org/wiki/Black%E2%80%93Scholes_equation

GLHF   

[americanpegasus]

The risk is that in an explosive price increase short sellers make take so much of a loss that they can't pay back the loan despite margin requirements and forced liquidation, and you will lose principal. That and (compared to keeping coins in your own wallet) the risk getting Goxed. I'll let you decide for yourself whether or when that is a good deal.

Ahh, I understand.  Lending is like shorting your own asset.  But people can borrow the coins to go long as well, right?  In that case I'm guessing that if the price collapses too quickly you lose your principal.  
  
Also, the time is pretty much now to start managing our own coins.  No excuse to get Gox'd with a stable 0.9 release, MyMonero, and OS.

[americanpegasus]

Alright, let's take a look at a sample case.  
  
 
  
So let's say someone took the 0.0199% loan for a full 60 days.  This means the lender would get 1.194% total interest after 2 months?  Or basically a 7.164% APR?  Am I doing that math right?

[smooth]

But people can borrow the coins to go long as well, right?

To go long people would borrow Bitcoins and then use them to buy XMR (or whatever other coin).

In that case I'm guessing that if the price collapses too quickly you lose your principal.

 
Yes if you lend out Bitcoin and people use it to buy a coin that collapses too quickly you can lose principal.

None of these losses have happened so far on Poloniex afaik, but I understand there have been margin losses on some of the leveraged Bitcoin exchanges.

Also, the time is pretty much now to start managing our own coins.  No excuse to get Gox'd with a stable 0.9 release, MyMonero, and OS.

There is never a good time to get Goxed.

[smooth]

So let's say someone took the 0.0199% loan for a full 60 days.  This means the lender would get 1.194% total interest after 2 months?

Yes that is correct (except that the interest is paid calculated along the way, once every few minutes, not at the end). You could possibly reinvest your earnings in which case the compounded return could be higher, if the loan is repaid early and you reinvest the total, but no guarantee you would be able to reinvest at the same or higher rate.

EDIT: While the interest/fees are calculated and credited frequently (minutes) they are paid when the loan is repaid. Thanks to TrueCryptonaire for the correction.

[iCEBREAKER]

But people can borrow the coins to go long as well, right?

To go long people would borrow Bitcoins and then use them to buy XMR (or whatever other coin).

In that case I'm guessing that if the price collapses too quickly you lose your principal.

 
Yes if you lend out Bitcoin and people use it to buy a coin that collapses too quickly you can lose principal.

None of these losses have happened so far on Poloniex afaik, but I understand there have been margin losses on some of the leveraged Bitcoin exchanges.

Also, the time is pretty much now to start managing our own coins.  No excuse to get Gox'd with a stable 0.9 release, MyMonero, and OS.

There is never a good time to get Goxed.

Yes, always keep a stash offline, frozen in carbonite.

But with your hot money, you can do fun tricks like pair trades:

1.  Borrow Dash at ~0%
2.  Sell Dash for BTC
3.  Buy XMR with BTC
4.  Profit
5.  LULZ

And thanks to Polo's XMR/Dash market you may be able to cut out the middle BTC step, saving some trading fees.

[TrueCryptonaire]

So I have a few thousand XMR I am thinking about lending out on Polo.  
  
I understand the risk is pretty low for a fairly guaranteed return.  What rate do you think I should lend out at?  I'm still a little confused on how the lending rates work.

i can not tell you what rate to lend out that coins. the rate you set is per 24 hours, but it gets deducted hourly or maybe even lower timeframes (i am not sure!)

so if a shorter gets 1000 coins from you for 0.5%, but after 2 hours he decides it was not such a good idea and returns the coins to you without doing a trade -> you will still get some, but not the 0.5 %

in my opinions its not worth it, but a lending market should develop, so do what you feel is best.



maybe TC can tell us all about it, he seems to know best.. 

They calculate the return quite often actually, I think it is in basis of minutes rather than hour(s). Usually the loan is held by for a few hours to a few days and then it goes automatically to market.
What rate to lend out is based on supply vs. demand: You go to lending, look at lending offers and then find where the majority of coins are and place your order for 0.00001% below the majority. Usually you need to waite some time as someone wants to borrow your coins. The longest I've waited has been like days and the rate being the minimum. Sometimes there is absolutely no interest to short it, not even one shorter, and actually that is the usual case with XMR despite the trendline has been pretty favorable to shorters in the past.
Basically what you can expect to get from lending is dust but at some point Monero dust might be more valuable than its weight in gold.

[iCEBREAKER]

So I have a few thousand XMR I am thinking about lending out on Polo.  
  
I understand the risk is pretty low for a fairly guaranteed return.  What rate do you think I should lend out at?  I'm still a little confused on how the lending rates work.

i can not tell you what rate to lend out that coins. the rate you set is per 24 hours, but it gets deducted hourly or maybe even lower timeframes (i am not sure!)

so if a shorter gets 1000 coins from you for 0.5%, but after 2 hours he decides it was not such a good idea and returns the coins to you without doing a trade -> you will still get some, but not the 0.5 %

in my opinions its not worth it, but a lending market should develop, so do what you feel is best.



maybe TC can tell us all about it, he seems to know best.. 

They calculate the return quite often actually, I think it is in basis of minutes rather than hour(s). Usually the loan is held by for a few hours to a few days and then it goes automatically to market.
What rate to lend out is based on supply vs. demand: You go to lending, look at lending offers and then find where the majority of coins are and place your order for 0.00001% below the majority. Usually you need to waite some time as someone wants to borrow your coins. The longest I've waited has been like days and the rate being the minimum. Sometimes there is absolutely no interest to short it, not even one shorter, and actually that is the usual case with XMR despite the trendline has been pretty favorable to shorters in the past.
Basically what you can expect to get from lending is dust but at some point Monero dust might be more valuable than its weight in gold.

You don't have to join in TC's race to the bottom lending rates.

Just one day of 0.1% is equal to 100 days at 0.001%.

I've made more than a couple entire XMR (not dust) lending for reasonable fees.

Try to figure out what the market will bear, taking into account it's a moving target.

The only reason to subsidize the shorts (IE, charge less than the max the market will bear) is if you want to keep the price down (so you can get cheap XMR for your stack).

[TrueCryptonaire]

So let's say someone took the 0.0199% loan for a full 60 days.  This means the lender would get 1.194% total interest after 2 months?

Yes that is correct (except that the interest is paid along the way, once every few minutes, not at the end). You could possibly reinvest your earnings in which case the compounded return could be higher, but no guarantee you would be able to reinvest at the same or higher rate.

Actually the interest you get paid once the loan is repaid, therefore if you want to build a compound interest vehicle, it is in your best interest that you hold the minimum loan periods and keep relending the interest payments.

[smooth]

So let's say someone took the 0.0199% loan for a full 60 days.  This means the lender would get 1.194% total interest after 2 months?

Yes that is correct (except that the interest is paid along the way, once every few minutes, not at the end). You could possibly reinvest your earnings in which case the compounded return could be higher, but no guarantee you would be able to reinvest at the same or higher rate.

Actually the interest you get paid once the loan is repaid, therefore if you want to build a compound interest vehicle, it is in your best interest that you hold the minimum loan periods and keep relending the interest payments.

That's interesting since is charged to the borrower in real time. Poloniex just holds on to it I guess.

What I've noticed when lending is that you will often get many small loans instead of one big one and some of them get paid off frequently so you end up with coins released to your borrowing account. It wasn't clear to me that was all from repayments and not interest, but in hindsight that makes more sense. Thank you for the clarification.

[dnaleor]

short term chart:



consolidation in the next few days is my bet. But when we break that wedge, I expect even higher volume and a spike towards 0.0028-0.0030 BTC

[smoothie]

short term chart:



consolidation in the next few days is my bet. But when we break that wedge, I expect even higher volume and a spike towards 0.0028-0.0030 BTC

somehow I agree with the movement..just not the time frame.

The wedge is too short term to tell much of anything at this point.  larger wedge may emerge and draw this out a bit more before there is a decision one way or another.

[RustyNoman]

The longer the consolidatoin, the higher the price will go. I hope for every 20% price rise, it consolidates for a month.

[TrueCryptonaire]

More then an year ago I thought 1$ could be easily supported if this community

Perhaps it's that the community does not care about $1's value in XMR. It's like your house. The main reason for owning is not RE speculation, it is security. As long as that's provided, there is little need to check the price.

You speak in such a bearish manner that I am thinking you are accumulating.

[binaryFate]

[...]

You speak in such a bearish manner that I am thinking you are accumulating.

Will be good to apply to yourself some time in the future.

[Bassica]

Did someone go massively short earlier? Lending markets were drained of 50k xmr.