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

[wangxinxi]

We just launched Coinut (https://coinut.com), the only place where you can trade bitcoin options. Predicting the market direction is usually difficult, while predicting the volatility is relatively easier because the volatility after high volatility is usually still high, but the trend of BTC/USD after a slump is usually...unclear. Through options, you can make profit from volatility trading with confidence. This is just one advantage of trading options, and the following gives you a complete list

• By trading volatility, you can make profit no matter which direction the price is going in
• You can also make profit by predicting the market direction
• Your maximum possible loss/profit is determined at the very beginning so you don't need to worry after you buy an option
• High leverage without default risk

What are options?
Options are a simple way to trade price fluctuations. By trading options, you can profit in both bearish and bullish markets. For example, if you believe the price of BTCUSD will go above 500 by next Friday, you can buy a BTCUSD call option (or sell a put option) which has the strike price equal to 500 and expires on next Friday. If you hold the option and if the price is indeed above 500 at the end of next Friday, you win, otherwise you lose. Instead of holding it, you can also sell the option to others before it expires.

The options in our platform are bitcoin settled. No matter you are are a seller or a buyer, all you need is bitcoin.


How to trade when I cannot predict BTC's direction?
You can bet on bitcoin's price direction if you are sure about it. But in most cases, we don't know the direction. Instead of betting on the direction, via options, you can trade its volatility, which is generally easier to predict. For example, if BTC/USD is now 400, and you know the volatility will be high, you can simultaneously buy a CALL option with strike price equal to 420 and a PUT option 380. Then you will be able to make profit no matter which direction BTC/USD goes in, because if it goes above 420, the CALL option will win, and if the price goes below 380, the PUT option will win. For more detailed information about trading options, please check https://coinut.com/how-to-trade.


How do you ensure the safety of my money
This is a critical question, and thus the answer will be a bit long.
First, we think hot wallets cannot be secure as many sites like Mt.Gox were hacked in the past no matter how hard they tried to secure their sites. So, we do not use hot wallets. Instead, we store all your Bitcoins in an offline computer (cold-storage) that cannot be accessed through the Internet, and the online wallet is only for monitoring purpose and cannot be used for withdrawals. The offline computer's hard disk and the wallet are all encrypted so even if some people get physical access to the offline computer, they still cannot access the wallet. Also, withdrawal requests are manually checked before they are processed.

Second, we believe transparency is very important. Therefore we adopted the proof of reserve audit approach described in this article. It generates verifiable audit results and has been adopted by a few big name exchanges such as Bitstamp and Bitfinex. We move this idea one step further. Instead of relying on a third party to verify that we have more Bitcoins than users' total balance, we directly show how much Bitcoin reserves we have and how much the total user balance is, and we do this weekly instead of quarterly or yearly. This removes the necessity of the third party, which users may not trust, and also provide much better transparency to the users.

Third, when we copy the double checked unsigned transactions from the online computer to the offline computer to sign, we do not use USB drives, as the online computer may be infected with virus (although this is unlikely as both the offline and online computers are based on Linux. The offline computer is dedicated for signing transactions after the Linux system was installed, so there shouldn't be any virus). We convert the unsigned transactions to a QR code and show it on the online computer's screen, and then we use the camera of the offline computer to scan it. After signing the transactions, we display the QR code on the offline computer and use the online computer's camera to scan the signed transactions and propagate them into the Bitcoin network.

Forth, our system is deployed on the always update-to-date Linux operating system, and we follow the best practices of Linux server management. Our system is deliberately programmed in a secure fashion. Our databases are backed up every day, and all important information is logged and backed up as well.

How do we calculate the price index
Please check https://coinut.com/index.

For more information, please visit https://coinut.com. You can also contact us by dropping us an email. Our email address is support@coinut.com

Chears,
The Coinut Team
Coinut.com

[wangxinxi]

OK, guys, after spending my past two years on my PhD thesis, the situation now has become very different from two years ago when I launched http://workforbitcoin.com.
Right now, it is much more difficult to gain people's trust.

But please also notice that I didn't run away with the money in http://workforbitcoin.com. That should increase your confidence on me, right?

[wangxinxi]

the fact you got a username that could be seen making you a chinese scammer
makes me think hell no will you ever seen 1 Satoshi of my money
i'm sorry but noone will risk money with you

You are right, I also won't let any of you to risk money with me. I am a researcher, for whom integrity and honesty are the most basic and crucial characteristics. But could you please don't judge a person by his/her name like you shouldn't judge a person by his/her skin color?

[wangxinxi]

Finally, some people is providing liquidity now.

[tucenaber]

I tried signing up to check it out but I don't get past the registering page :/

Edit: after a long time it actually said it sent an email. The dialog box was distorted though.

[tucenaber]

I suggest

- reducing the number of strikes.

- increasing the time to maturity

- introduce more than binary options


For me this doesn't seem very useful, but I'm not a day trader. The focus is very short term.

[ruletheworld]

Open up the market information without the need to register.

[wangxinxi]

I suggest

- reducing the number of strikes.

- increasing the time to maturity

- introduce more than binary options


For me this doesn't seem very useful, but I'm not a day trader. The focus is very short term.

Since we are the first to introduce exchange traded bitcoin options, we are still determining the expiration dates. Do you have any suggestions?
I am still working on vanilla options, but they could require a big amount of margin for sellers as the volatility can be extremely high. How much margin is required is still a question.

[apelike]

Open up the market information without the need to register.

Agree.. Why should someone register? Leaving my email is a big X sign for me.

[wangxinxi]

Open up the market information without the need to register.

Agree.. Why should someone register? Leaving my email is a big X sign for me.

As many of you requested, I have added the market data onto the home page. So you can now see the data without registration.

There is still quite limited liquidity. I need your help to add more.

[ruletheworld]

Open up the market information without the need to register.

Agree.. Why should someone register? Leaving my email is a big X sign for me.

As many of you requested, I have added the market data onto the home page. So you can now see the data without registration.

There is still quite limited liquidity. I need your help to add more.

Thanks! Looks much better. Just to clarify though, the underlying is 1 BTC? Any successful trades so far?
Also, how do you insure against counterparty risk? You need an FAQ page that explains the whole thing before people are comfortable putting real money into it.

[wangxinxi]

Regarding the counter-party risk, we currently support binary options only. For binary options, it is impossible for the sellers to default, because the maximum possible loss of sellers is fixed at the very beginning, and the system can automatically check the users' balance and reserve enough margin that can cover the maximum possible loss before the user actually buys an option. We are still working on vanilla options. As vanilla options are much more risky, it is going to take a little more time for us do work out a good solution.

As many of you suggested that it is difficult to trade when the maturity periods are too short, I have changed the periods from within 1 week to a few weeks. This can probably make you trade more deliberately.

To make you trade more conveniently, I am planning to add a binary options pricing calculator to the interface.

[MasterStranger]

Nice logo

[wangxinxi]

Nice logo

Yeah, the homepage and the core trading interface are all improved.

[MasterStranger]

Just registered on your website, there is some liquidity now. It looks quite cool.

[wangxinxi]

Guys, we have got some liquidity, but please come and provide more. Thanks!

[wangxinxi]

We just got a constant liquidity provider. So you can keep trading now. 

[wangxinxi]

We are running a signature contest here: https://bitcointalk.org/index.php?topic=865682.0. Please post yours if you are a designer.

[Possum577]

I like the fact that you're expanding investment options.

I just tried to buy a call option and received a "failed transaction" message.

I think it would help if you had account balance information so we can see how much BTC we've transferred over, how much we have to make trades, and how much has cleared through expired contracts/options. I don't want to transfer money every single time I make a trades...nor do I want to wait days for that transaction to go through.

I love that you have binary options and are trying to sort out how to provide vanilla options as well.

Keep at and don't default on payments and the community WILL start to support you.

[wangxinxi]

I like the fact that you're expanding investment options.

I just tried to buy a call option and received a "failed transaction" message.

I think it would help if you had account balance information so we can see how much BTC we've transferred over, how much we have to make trades, and how much has cleared through expired contracts/options. I don't want to transfer money every single time I make a trades...nor do I want to wait days for that transaction to go through.

I love that you have binary options and are trying to sort out how to provide vanilla options as well.

Keep at and don't default on payments and the community WILL start to support you.

Thank you for the questions. I saw you deposited. You can see your balance after you login. It's at the top left side of the Trade page. You can also check your deposit history from the History page. Expired options can be found in the History page as well. Defaults are impossible because sellers are required to reserve enough margin to cover maximum possible loss in order to open a position.