.

[stochastic]

Not to nick pick or anything, but why does this "zero-coupon bond" mature with a par value of 1.28 and not 1.00, which would be the normal par value for this type of financial security?

Overall great concept though, thanks for the contribution to the overall BTC community.

the .28 is essentially the interest.  A 'coupon' is the interest you receive.  Rather than sell 1 BTC bonds with .28 BTC coupons, its just a 0 coupon, 1.28 BTC bond.

EDIT: http://en.wikipedia.org/wiki/Coupon_(bond) is a good read to explain a bit better.

I understand all that.  But in the so-called real world, zero-coupon bonds will nearly always have a par value of 1.00 (usually $1000).  As such the original pricing would be something like .85 or whatever for these types of bonds, subject to market forces.

Again, I'm being nick picky, but if GLBSE/PPT is already trying to mimic a lot of practices that already exist in the financial world, why not go the same route with this type of instrument?

Well the idea developed over time.  Originally they were "priced" at 1.00 and paid a 0.28 dividend, and we were going to insure them for 25% of 1.00.  Then it was pointed out that it would be better to treat them more like zero coupon bonds with a face value of 1.28 and insure that for 25% (0.32) so we kind of got stuck with the 1.28 face value.  However, it is kind of nice the way it is.  The minimum bid is 1.00 and the max bid is 1.28.  Doing it the other way the minimum bid woudl be 0.78125 with a face value of 1.00000.  We may switch to that in the future.  Perhaps when we start each issue on it's second round we will rewrite the contracts to the more standard form (0.78125 minimum, face value of 1.00000).  If BS&T changes their program we will most certainly change ours and at that time we will probably move to the 1.00000 face value system.  Thanks!

1.00 is just a number so who cares.

It would a fun experiment to issue a few bonds with PPT only telling how many bonds are going for sale and how much it will mature for.

[1713563611]

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[1713563611]

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[1713563611]

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[1713563611]

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[Namworld]

Wow, GLBSE surely now gets Bitcoins coming in like a medium sized exchange!

2231 valid bids, 2300.4182609 BTC in valid bids, average bid 1.031, 1500 shares end at 1.012 per share. Bids lower than that would currently not get filled (and there is a crazy amount of high bids already - the upper 1/3 of currently winning bids is above 1.06)

There are more bids in here than MtGox exchanged in BTC <--> EUR in the last 24h (~1600 BTC)!

I guess, I'll just take my chances next week and hope for a lower price when the excitement might have cooled down a bit...

Or alternatively, buy @70-80 cents to the dollar (and thus make 70% at the end of the month).

Not to mention 4.7 kBTC actual volume > 2.3 kBTC of "maybe" volume.

I wonder if a mod would remove this off topic spam from our thread.

MPOE-Pretty Rude you are doing a great job at getting people mad at you.  

I have never thought it needed before for anyone but can this guy get banned? Spamming every thread is over the top.

And "she" lives in a supermarket. Just go check the address in the whois of the polimedia.us domain name...

Funny as hell, "she" was saying that Namworld, who is fully Nefario Verified^TM and even has a registered company in Canada, which he gave the name and registration number for people to check, should have OTC ratings for people to trust him...

Oh, are we talking about me?  

Yes, might be a bit rude, but still valid. She never implied it was required to be trusted, just that it would be helpful. If people wanted to verify personally, an established OTC-Rating would be a quite convenient way for them to confirm personally with me (and maybe chat a bit about it at the same time).

The fact I had already mentioned the lack of OTC ratings and already offered alternatives kind of bugged me however.

[gabbynot]

Well the idea developed over time.  Originally they were "priced" at 1.00 and paid a 0.28 dividend, and we were going to insure them for 25% of 1.00.  Then it was pointed out that it would be better to treat them more like zero coupon bonds with a face value of 1.28 and insure that for 25% (0.32) so we kind of got stuck with the 1.28 face value.  However, it is kind of nice the way it is.  The minimum bid is 1.00 and the max bid is 1.28.  Doing it the other way the minimum bid woudl be 0.78125 with a face value of 1.00000.  We may switch to that in the future.  Perhaps when we start each issue on it's second round we will rewrite the contracts to the more standard form (0.78125 minimum, face value of 1.00000).  If BS&T changes their program we will most certainly change ours and at that time we will probably move to the 1.00000 face value system.  Thanks!

Thanks for the response Burt.  

I think the GLBSE has massive potential; I just want them to avoid getting bogged down in unnecessary complications...no matter how minor they seem at first.

[Rygon]

Wow, someone but some serious BTC into the PPT.A. One person took 500 of the bonds at 1.07, and it looked like a snipe at the end. I think we'll see in future auctions that a few big players (In Bitcoin, at least) will end up with the majority of the bonds. Considering that there are some bonds being sold at the 1.19 point just two days later, that would be a 10% profit (!!!) if that buyer could unload them all. It's Pirate rates with less exposure to default.

[PatrickHarnett]

Wow, someone but some serious BTC into the PPT.A. One person took 500 of the bonds at 1.07, and it looked like a snipe at the end. I think we'll see in future auctions that a few big players (In Bitcoin, at least) will end up with the majority of the bonds. Considering that there are some bonds being sold at the 1.19 point just two days later, that would be a 10% profit (!!!) if that buyer could unload them all. It's Pirate rates with less exposure to default.

Actually, probably the opposite.  The bigger depositors have better change of having their own pirate account, and smaller depositors (especially those with less than pirate's 100 coin minimum have significant chance of getting bonds at reasonable prices, above the 1.07.  If you were bidding 1.19, that's still 9% for the month.  Those selling early have a quick profit, but then still have to do something with their coins.

My opinion is that PPT.B will be even more interesting to watch.

[wachtwoord]

Maybe they bought the bonds, sold them for a profit. Then redeposited with Pirate until the next bond offering. This would not lower exposure to a Pirate default however.

[PatrickHarnett]

Maybe they bought the bonds, sold them for a profit. Then redeposited with Pirate until the next bond offering. This would not lower exposure to a Pirate default however.

That still carries the risk that the issue and after-market would be a flop.  But, they probably had the math worked out at a neutral point so they could be indifferent between one outcome or the other.  But while this is a good product, it may not be the best product for people with pirate accounts, especially when the floor price increases.

[Sukrim]

If you were bidding 1.19, that's still 9% for the month.  Those selling early have a quick profit, but then still have to do something with their coins.

No, it's less than 8%: 7,56% to be precise.

Anyways, I managed to pull off quite some profit from my shares already and invested them in mining bonds. As soon as the GLBSE API comes out, I might open up a nice asset myself with them...

I agree that PPT.B will be really interesting to watch. Interestingly it seems people are already expecting a high IPO price and bidding 1.05 and above from the beginning...

[PatrickHarnett]

I was being lazy and didn't bother adjusting for term or the ratios.  Subtracting was easier.

[Gomeler]

Wow, someone but some serious BTC into the PPT.A. One person took 500 of the bonds at 1.07, and it looked like a snipe at the end. I think we'll see in future auctions that a few big players (In Bitcoin, at least) will end up with the majority of the bonds. Considering that there are some bonds being sold at the 1.19 point just two days later, that would be a 10% profit (!!!) if that buyer could unload them all. It's Pirate rates with less exposure to default.

Actually, probably the opposite.  The bigger depositors have better change of having their own pirate account, and smaller depositors (especially those with less than pirate's 100 coin minimum have significant chance of getting bonds at reasonable prices, above the 1.07.  If you were bidding 1.19, that's still 9% for the month.  Those selling early have a quick profit, but then still have to do something with their coins.

My opinion is that PPT.B will be even more interesting to watch.

I can guarantee there'll be guys like me(or at least me) who are just rolling weekly mining profits into these bonds. I rolled ~5 days of mining in to PPT.A and plan on rolling 7 days of mining in to PPT.B. This is a damn convenient option for those w/o FS&T accounts. It'll be interesting to see if PPT.A has as much of a frenzy about it during the initial offering.

[stochastic]

While the prediction market has flaws, and there is no real money involved, it is still fun...

Will PPT.A pay the 1.28 BTC face value to bondholders by 19 May 2012 23:59 UTC?

[PatrickHarnett]

While the prediction market has flaws, and there is no real money involved, it is still fun...

Will PPT.A pay the 1.28 BTC face value to bondholders by 19 May 2012 23:59 UTC?

Unless there is a glitch on timing, yes.  I can cover a couple of thousand without any problem.

[Sukrim]

Wow, somebody _really_ needed these PPT.A shares! They sold up to 1.24!
https://glbse.com/asset/view/PPT.A

More money for me to invest in PPT.B...

So far I've made more than 7 bitcents per share per week, can't complain.

[schnell]

Wow, somebody _really_ needed these PPT.A shares! They sold up to 1.24!
https://glbse.com/asset/view/PPT.A

More money for me to invest in PPT.B...

So far I've made more than 7 bitcents per share per week, can't complain.

Bought 10 for 1.079 when they came out, sold them last night all for 1.179

[Otoh]

how about moving the end time forward 3 or better still 4 hours in the future to make it more Europe friendly, it would still work OK for the States &/or put it on a Sunday or something if it clashes with US work hours, say finish UTC @ 10pm Fri = 6pm Fri NY, 3pm LA & 11pm Fri UK, Midnight Fri CET

[Sukrim]

I agree, 3 AM CET is not really "funny" just to earn something like a handful of Euros in most cases...

[Otoh]

I agree, 3 AM CET is not really "funny" just to earn something like a handful of Euros in most cases...

I think that it's 4am CET close atm (which I'm on) & @Burt thanks for looking in to a possible move

edit: you're right it's 3am as we're on CEST atm apparently http://www.timeanddate.com/library/abbreviations/timezones/eu/cet.html

edit edit: nope, I'm still confused, if it closes at 2am UTC, seems to be in just under 6 hours time, which for Spain makes 4am   whatever I hate to try sniping drunk - which I would be if I stayed up until then

[John (John K.)]

A little less than 2 hours to go until this week's auction.

And it's over!   Woke and saw I managed to grab some *shares* @ 1.08~!

*edit:shares not coins

[PatrickHarnett]

A little less than 2 hours to go until this week's auction.

And it's over!  Woke and saw I managed to grab some coins @ 1.08~!

Well, it all seemed to happen in the last few minutes again with volume spiking from around 2000 into the mid 3000's (not sure because of the refresh timing).  The timing for the European buyers is an issue (as mentioned, and it will be discussed some more), but we haven't even been through one whole cycle yet.

[MrTeal]

Wow, looks like the average price went from 1.0725 for PPT.A to 1.0812 for PPT.B. Before listing fees PPT has cleared 162 BTC just from the higher IPO sale price, in addition to the extra 62 they'll make from 7% interest on 2000 BTC compounded four times as opposed to the 1.28BTC face value.

Great operation. Even if Pirate defaults they're only out 478BTC and if he doesn't they make 162BTC now and another 62BTC in four weeks.