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chriswen
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May 18, 2015, 12:15:46 AM |
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Hi ... I'm sure you guys have lots of 'top priorities,' including marketing, but I'm wondering if you have any near-term plans to implement some type of portfolio margining, particularly for complex option strategies?
For example, because I'm a degenerate gambler and ultra bullish on btc, I used all my margin to sell binary puts. But that shouldn't preclude me from also selling calls for the same expiration, right? The two positions cannot simultaneously settle out-of-the-money. I know some brokers allow these types of positions with equity, index options and such. What are your thoughts?
Well one thing is that you used all of your margin so they can't give you some cause they don't know where you'll place them. What if you used most of your margin for puts? When you sell calls does it give you margin back? |
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wangxinxi (OP)
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May 18, 2015, 12:59:21 AM |
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Hi ... I'm sure you guys have lots of 'top priorities,' including marketing, but I'm wondering if you have any near-term plans to implement some type of portfolio margining, particularly for complex option strategies?
For example, because I'm a degenerate gambler and ultra bullish on btc, I used all my margin to sell binary puts. But that shouldn't preclude me from also selling calls for the same expiration, right? The two positions cannot simultaneously settle out-of-the-money. I know some brokers allow these types of positions with equity, index options and such. What are your thoughts?
Well one thing is that you used all of your margin so they can't give you some cause they don't know where you'll place them. What if you used most of your margin for puts? When you sell calls does it give you margin back? Right, the margin calculation can be improved. Currently, we calculate all positions' margins separately. |
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chriswen
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May 18, 2015, 02:07:10 AM |
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Hi ... I'm sure you guys have lots of 'top priorities,' including marketing, but I'm wondering if you have any near-term plans to implement some type of portfolio margining, particularly for complex option strategies?
For example, because I'm a degenerate gambler and ultra bullish on btc, I used all my margin to sell binary puts. But that shouldn't preclude me from also selling calls for the same expiration, right? The two positions cannot simultaneously settle out-of-the-money. I know some brokers allow these types of positions with equity, index options and such. What are your thoughts?
Currently we don't directly provide strategies like strangle or straddle. However, you can manually open two positions to form a strangle or straddle strategy. They are in essence the same. If you want to hedge with the underlying asset, then you should have an account in exchanges like Bitfinex, Bitstamp or BTC-e.com. We will probably design an unified interface for all these kind of positions in the future. But as you said, right now our top priorities are other things like marketing. That interview with BTCVIX should get you a lot of exposure. Go contact him. He's done these hangouts with OKCoin, Bitfinex, Huobi |
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wangxinxi (OP)
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May 18, 2015, 02:12:40 AM |
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Hi ... I'm sure you guys have lots of 'top priorities,' including marketing, but I'm wondering if you have any near-term plans to implement some type of portfolio margining, particularly for complex option strategies?
For example, because I'm a degenerate gambler and ultra bullish on btc, I used all my margin to sell binary puts. But that shouldn't preclude me from also selling calls for the same expiration, right? The two positions cannot simultaneously settle out-of-the-money. I know some brokers allow these types of positions with equity, index options and such. What are your thoughts?
Currently we don't directly provide strategies like strangle or straddle. However, you can manually open two positions to form a strangle or straddle strategy. They are in essence the same. If you want to hedge with the underlying asset, then you should have an account in exchanges like Bitfinex, Bitstamp or BTC-e.com. We will probably design an unified interface for all these kind of positions in the future. But as you said, right now our top priorities are other things like marketing. That interview with BTCVIX should get you a lot of exposure. Go contact him. He's done these hangouts with OKCoin, Bitfinex, Huobi Thanks, just sent to him a message. |
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Indamuck
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May 18, 2015, 08:28:55 PM |
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Mr. Wang,
I'm struggling with the wide spreads and lack of liquidity - I'm sure you understand.
And ideal product from this customer's seat, and I think for your business prospects, look like this:
A. A small index futures contract on a recognized BTC price index. (List a new contract every 3 months, like other commodities.)
B. Index options, binary or vanilla, that settle on the index value.
I particular I would point to KOSPI Index futures & options (the most widely traded index in futures in the world), and 796xChange, as examples. I've traded both of those, and do so from time to time. I think a futures contract can drive much better volume for your options ...
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chriswen
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May 21, 2015, 09:42:33 AM |
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So what happened with the marketmaker for the short term binary options?
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Indamuck
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May 21, 2015, 08:51:38 PM |
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Question:
If I am long ~12 contracts (same contract), bought at various times and various prices, and then I execute a separate 'sell' order of that same contract, will one of my existing contracts be sold, or will I be left with +12 contracts and -1 contract tying up 13 contract's worth of margin?
In other words, in order to exit a position must I use the 'close' button in the 'open positions' window?
Thanks.
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Indamuck
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May 21, 2015, 08:57:08 PM |
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Hope you guys are working on a reiteration of the trading page. After only a handful of positions the 'open positions' window becomes unwieldy. Rather than listing every single transaction separately perhaps you can consolidate positions by using an 'average price' and allow customers to filter via expiration, etc. Ultimately for a trader that is what is important, not all the accounting detail you are cramming in their now. That can be presented or made available somewhere else, in my view.
Thanks.
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chriswen
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May 25, 2015, 03:31:08 PM |
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It seems Vanilla options have changed to $5 strikes which is useful.
And $0.25 strikes have been added to the half hour contracts. Those are actually quite fun to play around with. I've been quite successful with that.
I think they have plans to change the trading interface.
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chriswen
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May 25, 2015, 10:51:53 PM |
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@Indamuch have you traded the 30 minute options? They're awesome. Really good when we finally get volatility and move around.
It seems like the market maker needed to adjust their odds a bit too.
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Indamuck
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May 26, 2015, 03:42:25 AM |
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@Indamuch have you traded the 30 minute options? They're awesome. Really good when we finally get volatility and move around.
It seems like the market maker needed to adjust their odds a bit too.
Well, for a couple days I had been raping the market maker on the 30-min binary options, so it doesn't surprise me that they have all but abandoned that effort. I'm saddened, but not surprised ... Question for OP: Please tell us the algorithm for calculating your proprietary index: How often is it re-calcuated? What are the inputs? What is the formula? If you could be precise, that would be most appreciated. |
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chriswen
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May 26, 2015, 04:32:16 AM |
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@Indamuch have you traded the 30 minute options? They're awesome. Really good when we finally get volatility and move around.
It seems like the market maker needed to adjust their odds a bit too.
Well, for a couple days I had been raping the market maker on the 30-min binary options, so it doesn't surprise me that they have all but abandoned that effort. I'm saddened, but not surprised ... Question for OP: Please tell us the algorithm for calculating your proprietary index: How often is it re-calcuated? What are the inputs? What is the formula? If you could be precise, that would be most appreciated. Lol I've been raping the market maker quite well too. They've added the $0.25 strikes so its a lot more fun. The market maker is missing sometimes but its still up for playing. One rule of thumb for people is that during low volatility times you want buy out of the money options really cheaply when you think it might move soon. And during high volatility times you buy in the money options when you're convinced on a direction. Since out of the money is still freaking expensive during those times. As for the formula its supposed to be based off of Bitfinex, btc-e , and bitstamp. It's a bit more complex than that. Hopefully they'll be a give more information on the index or rework it. But thinking about it as an average helps. And you're also just trading the index. Yesterday the volatility on it was crazy. And volatility would be really cheap too. You just need to do some range bound trading. Index gets to the top of the range, and then load up on puts. |
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chriswen
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May 26, 2015, 09:55:44 PM |
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Got my withdrawal processed really quickly!
Also they recently did another audit and they have 22 more btc in their wallets.
And 24 hour volume is at 29k.
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Indamuck
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May 27, 2015, 05:03:24 AM |
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Withdrawals are quick, yes. But it is currently impossible to download historical activity or current positions to excel ... and the site doesn't provide any performance stats. These are basic features for a trading site guys. It is currently too unwieldy to keep track of any sizeable portfolio of positions. And what is the formula for your index?  How often is it recalculated?!? If only your market makers know these details, you've built in an advantage for them ... |
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Indamuck
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May 27, 2015, 05:06:04 AM |
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Got my withdrawal processed really quickly!
Also they recently did another audit and they have 22 more btc in their wallets.
And 24 hour volume is at 29k.
Your shilling is a bit too obvious Chris ... not necessarily reassuring. |
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navaman
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May 28, 2015, 08:25:24 PM |
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Specifically about vanilla options:
Is there time & sales available, volume and open interest?
It is obvious there is a single market maker as you can click on the strike and see the depth. Of course, they can collude to limit the availability at each price but this is unlikely.
Also, without portfolio risk being implemented, you are unlikely to attract serious MM as the amount required to trade a significant amount brings credit risk to the forefront.
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navaman
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May 28, 2015, 11:04:37 PM |
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It escaped me why the pricing doesn't work and can explain the confusion. Strike prices are set in U.S. Dollars but the options are priced in Btc. If you look at this CME quote page for currencies, you will see they are all priced in USD/Per 1 foreign unit. Here: http://www.cmegroup.com/trading/fx/The options are the same way. To use Btc as capital in this case, switch to Btc per 1 USD, set contract size and strike prices. This would make much easier for people to know what they are paying. |
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chriswen
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May 29, 2015, 12:06:52 AM |
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So what are you saying, price contracts in dollars?
I think they're having a UI update. But currently the best way you can get this info is that before you place an order it'll tell you the breakeven settlement price.
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Indamuck
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June 02, 2015, 02:48:23 AM |
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Mr. Wang,
I know you guys are working on a lot. Just want to illustrate how your current margin regime is limiting your trading volume.
Right now I have a strangle on using binary options, and I'm prepared to hold the entire position through expiration.
With this position I should have 1/2 margin available, which I would like to be trading the 30-min contracts ... but you've tied my hands by requiring margin on both the call and put-sides of my position.
I think you understand ... thanks.
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