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Author Topic: options for leverage  (Read 3417 times)
mav
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May 14, 2012, 03:50:20 AM
 #1

With bitcoinica down, what options do speculators have for leveraging?

I can't actually think of any, which means it's back to the pre-bitcoinica days, with just a pure trading market. If I'm mistaken and there are indeed other leverage options around, I would be interested to know the other services offering longs/shorts.

Sure, Bitcoinica will be back online again in the near future. But in the meantime, without the 'stabilising effects' of bitcoinica that was often touted, what's the most likely thing to happen with the market?
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terrytibbs
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May 14, 2012, 03:52:01 AM
 #2

Loans
teflone
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May 14, 2012, 04:36:00 AM
 #3

a fulcrum

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MarketNeutral
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May 14, 2012, 04:38:54 AM
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a fulcrum
This is probably your best choice.
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May 14, 2012, 04:39:52 AM
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<GASP> Speculating without leverage!!!  </GASP>
mav
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May 14, 2012, 05:04:28 AM
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<GASP> Speculating without leverage!!!  </GASP>

If I recall, there was a significant gasp around this time last year because there was... no leverage. Just wondering, maybe it was meant to be

Disclosure : I never had, and never will have, a bitcoinica account and am still dubious (although open minded) regarding the benefits of such systems.
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May 14, 2012, 08:49:44 AM
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With bitcoinica down, what options do speculators have for leveraging?

I can't actually think of any, which means it's back to the pre-bitcoinica days, with just a pure trading market. If I'm mistaken and there are indeed other leverage options around, I would be interested to know the other services offering longs/shorts.

Sure, Bitcoinica will be back online again in the near future. But in the meantime, without the 'stabilising effects' of bitcoinica that was often touted, what's the most likely thing to happen with the market?

Kronos.io soon: http://www.thebitcointrader.com/2012/05/meet-kronosio-ringcoins-answer-to.html
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May 14, 2012, 04:06:17 PM
 #8

Egads... who would want to attempt to speculate on a market that barely moves from 5 per BTC
with bitcoinica costs being so high to get in and out plus the costs of holding a position?

I gave up on it. Withdrew my money a month or so ago and have been just selling my BTC from
mining when the price is over 5.

I am much happier for it. Now combine that with the hacking of bitcoinica through admin incompetence,
it appears to have been the correct call. Now my money is not tied up in a situation like that.

win win. I will mine and sell until it is no longer worth it and move on.
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May 14, 2012, 04:23:58 PM
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Egads... who would want to attempt to speculate on a market that barely moves from 5 per BTC
with bitcoinica costs being so high to get in and out plus the costs of holding a position?

I gave up on it. Withdrew my money a month or so ago and have been just selling my BTC from
mining when the price is over 5.

I am much happier for it. Now combine that with the hacking of bitcoinica through admin incompetence,
it appears to have been the correct call. Now my money is not tied up in a situation like that.

win win. I will mine and sell until it is no longer worth it and move on.

+1

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waspoza
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May 14, 2012, 04:27:17 PM
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win win. I will mine and sell until it is no longer worth it and move on.

Maybe buy shares of mining companies instead of selling, so u can mine while u mine. Yo dawg.
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May 14, 2012, 09:40:08 PM
 #11

win win. I will mine and sell until it is no longer worth it and move on.

Maybe buy shares of mining companies instead of selling, so u can mine while u mine. Yo dawg.

wurd... Cheesy

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May 15, 2012, 05:33:00 PM
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win win. I will mine and sell until it is no longer worth it and move on.

Maybe buy shares of mining companies instead of selling, so u can mine while u mine. Yo dawg.
That's what I'm doing, and the dividends are fantastic.
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May 15, 2012, 08:21:57 PM
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win win. I will mine and sell until it is no longer worth it and move on.

Maybe buy shares of mining companies instead of selling, so u can mine while u mine. Yo dawg.
That's what I'm doing, and the dividends are fantastic.
Buy BMMO they pay the best! Cheesy

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May 29, 2012, 02:56:52 PM
 #14

Trading USD/BTC futures on ICBIT.SE (coming really soon). Along with BRENT and GOLD futures coming up too. It's safer for users since it's open market and not just a bucket shop.

More info here - https://bitcointalk.org/index.php?topic=50817.0 and here https://bitcointalk.org/index.php?topic=60548.0 .

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
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cytokine
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June 03, 2012, 07:42:30 PM
 #15

If you really want leverage, just take out a big loan in your home currency, and then trade yourself right into the land of riches.

Yes... it's that easy... that's why everyone is doing it  Undecided

Seriously though, trading is tough stuff. Most people who try it blow out.
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June 04, 2012, 07:18:57 PM
 #16

BitcoinOPX.com has just opened to the public and provides an avenue for leverage. Traders can create options for 10, 100, or 1000 BTC but only put down a fraction for escrow. Below is an example.

Bob only has $500, but thinks he knows for sure the BTC price (currently $5.20) will go down below $5 in one week. With $500 he can buy 96 BTC. If the price moves $.20 he stands to gain or lose 96 x $.20 = $19.20 at most.

Instead he creates a CALL 100 option with strike price $5.25, which means he will pay the owner the difference between strike price and actual price at maturity multiplied by number of bitcoins (if market price ends up higher). So if the actual price ends up at $5.50 he would owe $.25 x 100 = $25. He places the option on sale for half the price of estimated payout (for those betting long) $12.50.

The system uses a formula to calculate the amount of escrow Bob must use to cover the option, which comes to $58.53. With $500 Bob can create and sell 8 of these options which gives him 8 x $12.50 = $100.00 if all his options sell.

If Bob is right about the direction of the price he pockets $100.00 profit. Actually there is a trade fee of $.65/contract so we subtract another $5.20 leaving a net profit of $94.80. That's $75.60 more than Bob could have made exchanging BTC directly.
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June 07, 2012, 04:42:14 PM
 #17

Really, I feel like leverage (buying 2x what your investment can support) wasn't even that important compared to the ability to go long with BTC, or go short with USD.

If you're confident that the price will go down, in the current market, you can only trade on that confidence if you already hold the currency you think is going to go under. This shuts out people who are standing outside the community's hype from providing a voice of reason. With Bitcoinica or something similar, a person who never bought into BTC can "sell" and mellow out the market when sentiment is irrationally bullish, and a true believer (who has lots of BTC but little fiat) can "buy" and mellow out the market when sentiment is irrationally bearish.

That's the stabilizing influence, not the ability to make huge dumb bets that will explode in your face if the price drops 25 cents.

If there is something that will make Bitcoin succeed, it is growth of utility - greater quantity and variety of goods and services offered for BTC. If there is something that will make Bitcoin fail, it is the culture of naive fools and conmen, the former convinced that BTC is a magic box that will turn them into millionaires, and the latter arriving by the busload to devour them.
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June 07, 2012, 06:03:16 PM
 #18

That's the stabilizing influence, not the ability to make huge dumb bets that will explode in your face if the price drops 25 cents.

Exactly the reason to have futures market. Leverage (if someone wants to), ability to go short or long as one wishes, positive infuence on the spot market (stabilizing price, possibility to hedge risks).

Margin trading platform OrderBook.net (ICBIT): https://orderbook.net
Follow us in Twitter: https://twitter.com/orderbooknet
Ichthyo
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June 12, 2012, 02:15:52 AM
 #19

BitcoinOPX.com has just opened to the public and provides an avenue for leverage. Traders can create options for 10, 100, or 1000 BTC but only put down a fraction for escrow.

While I think basically another possibility to create and trade in options would be a valuable addition to the bitcoin universe, especially for BitcoinOPX there seems to be a chicken and egg problem -- unless someone acts as market maker. Before a lot of people make heavy use of optoins, there is zero chance to get a suitable option for any given demand.

-- Ichthyo
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June 12, 2012, 11:35:30 PM
 #20

BitcoinOPX.com has just opened to the public and provides an avenue for leverage. Traders can create options for 10, 100, or 1000 BTC but only put down a fraction for escrow.

While I think basically another possibility to create and trade in options would be a valuable addition to the bitcoin universe, especially for BitcoinOPX there seems to be a chicken and egg problem -- unless someone acts as market maker. Before a lot of people make heavy use of optoins, there is zero chance to get a suitable option for any given demand.

-- Ichthyo

Ichthyo,

You are right about the chicken and egg problem. I think the Bitcoin universe is still a bit too small to see spontaneous options created for their true function, which is making profit on the intention to buy or sell an asset (writing options).

This is one reason we're working on adding expanding trading categories to include gold, euros, and some tech stocks with our existing contract for difference model, which means traders don't need to own the underlying asset.

It's not prudent for us to act as market maker on a derivative like options, and not an actual commodity.

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