[ANN] Coinut.com - The only Bitcoin Options Exchange [beta]

[chriswen]

Got a 1 340 put fill at 0.009

Also they strikes were changed on 180 day binary options.

Makes sense. $16 strikes now to make it compatible with biweeklies.

You just won't see the $340 open interest until a day before expiration.

[Indamuck]

Yeah futures volatility is awesome.

I have a balance on bitmex (quanto futures), okcoin (20x) , and coinut (binary options and vanilla options).

Anyways I don't really go all in anyways. And all the products are a bit different.

Also Binary Leaps available now too.

For futures I'm only using 796 Exchange at the moment. One thing I really like is there is that the futures contract usually trades at a large premium/discount to spot. So I trade directionally, but also use prem/disc as a decision input. Also, they are trying to launch a CFD tied to Mainland PRC stocks. I think they've curtailed trading (?) due to crazy volatility of late, but I've traded that contract a bit and would love for it to gain some traction.

What are your thoughts on Okcoin vs. Bitmex? I've briefly looked at both, but haven't taken the plunge yet. Bitmex didnt' excite me because their homepage was too 'busy' and their futures contract pretty much traded at spot. The Bitmex principals are from 'sell side' wall street and I got turned off by the 'pitch' of all the noise on their site. That said, the founder writes a decent newsletter, and I appreciated his last one calling for a run to $300 before a pullback etc. etc. ... will confess I switched more bullish after I read it.

Okcoin ... I just read about several recent departures among their senior staff, questions about their audits (?), and decided not to bother. I'm already trading with one Chinese exchange, probably don't need to double my headaches.

[chriswen]

Yeah futures volatility is awesome.

I have a balance on bitmex (quanto futures), okcoin (20x) , and coinut (binary options and vanilla options).

Anyways I don't really go all in anyways. And all the products are a bit different.

Also Binary Leaps available now too.

For futures I'm only using 796 Exchange at the moment. One thing I really like is there is that the futures contract usually trades at a large premium/discount to spot. So I trade directionally, but also use prem/disc as a decision input. Also, they are trying to launch a CFD tied to Mainland PRC stocks. I think they've curtailed trading (?) due to crazy volatility of late, but I've traded that contract a bit and would love for it to gain some traction.

What are your thoughts on Okcoin vs. Bitmex? I've briefly looked at both, but haven't taken the plunge yet. Bitmex didnt' excite me because their homepage was too 'busy' and their futures contract pretty much traded at spot. The Bitmex principals are from 'sell side' wall street and I got turned off by the 'pitch' of all the noise on their site. That said, the founder writes a decent newsletter, and I appreciated his last one calling for a run to $300 before a pullback etc. etc. ... will confess I switched more bullish after I read it.

Okcoin ... I just read about several recent departures among their senior staff, questions about their audits (?), and decided not to bother. I'm already trading with one Chinese exchange, probably don't need to double my headaches.

Yeah futures usually trade at a premium. I also use that as an indicator, if it's too big I won't enter a position. Might miss something but nothing wrong with that.

Trading the Shanghai index is interesting but I have absolutely no experience with it, I'll stick to trading BTC. Have you heard of 1broker (ref link)? You can trade all sorts of CFDs with Bitcoin. Up to 200x leverage on forex. S&P 500, DAX 30, Dow Jones (20x). 11 stocks, and they'll be adding more (15x leverage).

I use Okcoin and Bitmex for different things. I think Okcoin is a lot more comparable to 796. The okcoin futures platform is really the most liquid one. Up to 20x leverage. I think there's more liquidity and tighter spreads then 796.

On the other hand Bitmex doesn't have a lot of liquidity. Price discovery isn't really done their, but you trade with the market makers on their. Bitmex offers two types of futures contracts. They have the XBU inverse futures which is basically the exact same thing Okcoin and 796 has. They only offer 2.5x leverage on those so it might not be your thing. XBU futures also don't have a lot of liquidity. There's Daily, Monthly Quarterly, Quarterly, 6 month.

Bitmex also has the XBT Quanto futures, these are designed so that as the price goes up you'll make more money then with traditional futures. Inverse futures, each contract is worth 1 USD. For quanto, 0.00001 XBT per 1 USD (Currently 0.0032 XBT per contract). They have some graphs to show the difference. So I'm bullish which is why I like trading XBT futures. Because of how it's structured, there's a slight premium. There's monthly, quarterly, and 6 month. There's a lot more liquidity on Quanto. You should be able to do scalps on the monthly contract. Make sure you take into account the premium, it fluctuates quite a bit. XBT Quanto offers up to 10x leverage.

Also unlike 796 and okcoin, they margin call you in parts. They don't take leftover money. Bitmex doesn't offer extremely high leverage, 10x is decent, but it's well suited for longer term contracts (No one else offers 6 months). They also have a unique product with XBT Quanto futures which gives you the opportunity to make more money in a bullish market.

Bitmex Sign-Up
Okcoin Sign-up

[chriswen]

Sorry about that, OKcoin is going through some heavy DDOS attacks last night.

Also Coinut removed the 4 hour and daily binary contracts which I think is a horrible idea.

You say you want to drive liquidity to contracts, but having contracts constantly expire, that brings volume. Having contracts expire faster will bring more volume. And users have a need for shorter contracts.

Also I have serious doubt about 6 month liquidity. That's a massive lockup period of capital. Maybe you should transition to 3 month or 4 month. You'll get extra volume like that too. 6 month capital lockup is expensive.

[CoinutScam]

spreads on the binary options are just way too large, just waiting for alt-options to open up.  If you watch the order books for the sites, you can actively see the manipulation of the price index at the expiration of the 30 minute windows. Your index calculation is also well off from real time, sometimes many seconds off.  Worst I have seen is over a minute delay between Bitstamp's order book, and the Coinut price index page reflecting this change, sometimes it does not reflect the change at all.  Fraudulent at best.

[CoinutScam]

Hi guys, for some of you who wants to know our index better, we just prepared a page for you https://coinut.com/index. It has all exchanges' bid and ask prices that we use updated in realtime.

Not even remotely close to being updated in realtime, bitstamp is usually consistently delayed, sometimes affecting the price index by 20 cents or more

[Indamuck]

Sorry about that, OKcoin is going through some heavy DDOS attacks last night.

Also Coinut removed the 4 hour and daily binary contracts which I think is a horrible idea.

You say you want to drive liquidity to contracts, but having contracts constantly expire, that brings volume. Having contracts expire faster will bring more volume. And users have a need for shorter contracts.

Also I have serious doubt about 6 month liquidity. That's a massive lockup period of capital. Maybe you should transition to 3 month or 4 month. You'll get extra volume like that too. 6 month capital lockup is expensive.

Thanks. I have to play less poker and spend more time exploring OKcoin, Bitmex, and 1broker, lol. If Okcoin is like 796 with more liquidity & tighter spreads, I might have to move.

[CoinutScam]

Both Bitfinex and Bitstamp offer WebSocket APIs that you could use to actually get the realtime index, rather than the polling system you currently use, which is definitely delayed.

[chriswen]

spreads on the binary options are just way too large, just waiting for alt-options to open up.  If you watch the order books for the sites, you can actively see the manipulation of the price index at the expiration of the 30 minute windows. Your index calculation is also well off from real time, sometimes many seconds off.  Worst I have seen is over a minute delay between Bitstamp's order book, and the Coinut price index page reflecting this change, sometimes it does not reflect the change at all.  Fraudulent at best.

Alt-options is not implementing Binary options.

Anyways there's nothing wrong with binary option spread. When you talk about the spread. Marketmakers don't need to keep a tight spread on binary options. If you look at a site like btcoracle there spreads are a lot wider.

[CoinutScam]

Wide spreads signify markets that have low liquidity.  Just because another site has wider spreads doesn't mean wide spreads are okay.  Would be nice to see tighter spreads.  Very little volume for the 30 minute binaries. 

[chriswen]

Wide spreads signify markets that have low liquidity.  Just because another site has wider spreads doesn't mean wide spreads are okay.  Would be nice to see tighter spreads.  Very little volume for the 30 minute binaries. 

It's extremely hard to market make binary options. That's why there's big spreads. Maybe if it's extremely liquid it might be possible. Anyways I don't find the spread a problem. It's not that hard to make money on them.

[wangxinxi]

Wide spreads signify markets that have low liquidity.  Just because another site has wider spreads doesn't mean wide spreads are okay.  Would be nice to see tighter spreads.  Very little volume for the 30 minute binaries.  

It's extremely hard to market make binary options. That's why there's big spreads. Maybe if it's extremely liquid it might be possible. Anyways I don't find the spread a problem. It's not that hard to make money on them.

Chris, you are absolutely right. It is extremely hard to make the binary options market especially for Bitcoin. That's the only reason for the spread. Market makers also want to gain more volume and make money. They just need to invest a lot of time to polish their pricing models to offer tighter spread.

[Indamuck]

Andy,

Take a look at short positions in btc at Bitfinex. If you have an account there you can access this statistic real time. I don't have my account open at the moment, but there are typically ~20,000 btc shorted there, most of it on a long-term basis. Fair to assume many of these are miners hedging their future production - large customers who maintain long-term positions. (Do Chinese miners also hedge on some of the Chinese exchanges? I'm not sure ...)

You should be able to offer a better hedging vehicle, i.e. call option alternative that is cheaper (better value) than borrowing btc and shorting at bitfinex. At bitfinex miners must deposit US$ and then pay to borrow btc in order to short. Now on your platform they would need to deposit and hold additional btc, a drawback, but by hedging via short calls, these minors would be saving money I'm thinking. Over time they would benefit from premium decay. Of course the longer-horizon contracts you offer, the better. And because of their volume sales, I would expect they would drive prices down to attractive levels, attracting positional traders like myself. THAT is your golden ticket: customers trading with customers, with market makers relegated to filling in the gaps.

You should run a hypothetical miner's portfolio and compare hedging cost on Coinut vs. Bitfinex. If you can make a compelling case for offering a better hedging vehicle for miner's prospective income streams, and you advertise THAT, you can steal Bitfinex' business here.

Anyway, ideas are a dime-a-dozen I know. Execution is always toughest ... lol.

[chriswen]

Regarding spreads it really depends on order flow. There's really a lot of risk with binary option makers because they don't know which direction it's going to go and it's hard when they're trading with people who are really good at predicting direction.

Basically the prices reflect the uncertainty in the market maker, and it's really uncertain.

But, if there's enough orderflow, enough people choosing to go short and long in a short time frame. I would think that the market maker would be able to lower their spreads. They would price it so that they'd want to be closer to a neutral hedge. If everyone is trying to buy long calls, they'd make those more expensive, and they'd make puts cheaper to buy.

[wangxinxi]

Regarding spreads it really depends on order flow. There's really a lot of risk with binary option makers because they don't know which direction it's going to go and it's hard when they're trading with people who are really good at predicting direction.

Basically the prices reflect the uncertainty in the market maker, and it's really uncertain.

But, if there's enough orderflow, enough people choosing to go short and long in a short time frame. I would think that the market maker would be able to lower their spreads. They would price it so that they'd want to be closer to a neutral hedge. If everyone is trying to buy long calls, they'd make those more expensive, and they'd make puts cheaper to buy.

You seem pretty good at it. Why not become a market maker of us?

[wangxinxi]

The spread for 30-minute binary options has been reduced significantly. Enjoy trading!

[CoinutScam]

they are currently not pulling from btc-e, even though it is up, that is fraud.  affecting the price index by about 2 dollars

[UserVVIP]

they are currently not pulling from btc-e, even though it is up, that is fraud.  affecting the price index by about 2 dollars

Don't a lot of resources that average Bitcoin exchange rates exclude BTC-E? The site has a pretty poor reputation, and isn't the most reliable site either. Honestly, I don't see the problem.

[wangxinxi]

they are currently not pulling from btc-e, even though it is up, that is fraud.  affecting the price index by about 2 dollars

Don't a lot of resources that average Bitcoin exchange rates exclude BTC-E? The site has a pretty poor reputation, and isn't the most reliable site either. Honestly, I don't see the problem.

Yeah, btc-e.com is quite unreliable. Its API service was down during the last few minutes because their DNS service got some problem. We may consider removing btc-e.com in the future.

[CoinutScam]

if you tell your users that you use btc-e when it is up, you must use it when it is up.  and you must not use it when the servers are down.  otherwise you are committing fraud.  it does not matter if their servers are intermittently up and down, you must keep update your index in realtime, which you are not doing. for example, btc-e is down right now, but you are factoring it into your index, which is fraud