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Author Topic: Totally confused with swaps.  (Read 3843 times)
Dafar
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October 27, 2014, 07:46:16 PM
 #21

Good info, tagged for later




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1513514070
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sbrzol
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October 27, 2014, 09:25:45 PM
 #22

Ok,  I made an offer at bitfinex:  100 BTC 0.2% 30 days  , i am curious


What does Non-Compounded and Compounded mean at http://bfxdata.com/calculators/swaps.php ?
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October 27, 2014, 09:30:40 PM
 #23

Ok,  I made an offer at bitfinex:  100 BTC 0.2% 30 days  , i am curious

I don't know if someone is gonna take that 0.2% (there's a 1'671 BTC at 0.17% right now). But anything below that like 0.16% will do.
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October 28, 2014, 12:50:13 AM
 #24

It seems not a good return, 100 coins to make 0.2 coins per day... if you use those coins to buy miners, only 40 coins could make you 0.2 coins per day

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October 28, 2014, 12:59:52 AM
 #25

It seems not a good return, 100 coins to make 0.2 coins per day... if you use those coins to buy miners, only 40 coins could make you 0.2 coins per day

But those 40 BTC are then gone, and may never see ROI let alone any profit. The 100BTC (if he's a holder anyway) are better working for him than sitting in some dumb safe wallet. Tongue

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October 28, 2014, 02:08:40 AM
 #26

Ok,  I made an offer at bitfinex:  100 BTC 0.2% 30 days  , i am curious


What does Non-Compounded and Compounded mean at http://bfxdata.com/calculators/swaps.php ?


If your offer is taken and held for full 24hrs, you should get 0.2BTC. Now you can either withdraw that BTC (non-compound) or let it ride and loan it out again, so next day you're lending 100.2BTC and now should get 0.2004 on the second day, that's where compounding comes in

Step1: Conglomerate of miners corner the hash rate
Step2: ??
Step3: People invest in BTCina In code miner conglomerate we trust™ coin $$$ Profit $$$
DaRude
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In order to dump coins one must have coins


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October 28, 2014, 03:21:40 AM
 #27

You're all welcome

I'm glad my loan sharkery is amusing to all  Angry
















 Grin Tongue

I meant it, in the nicest way possible  Grin

Step1: Conglomerate of miners corner the hash rate
Step2: ??
Step3: People invest in BTCina In code miner conglomerate we trust™ coin $$$ Profit $$$
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October 28, 2014, 03:24:48 AM
 #28

It seems not a good return, 100 coins to make 0.2 coins per day... if you use those coins to buy miners, only 40 coins could make you 0.2 coins per day

But those 40 BTC are then gone, and may never see ROI let alone any profit. The 100BTC (if he's a holder anyway) are better working for him than sitting in some dumb safe wallet. Tongue

Don't forget lending is not risk free like keeping coins in the safe. If market moves a lot there might not be enough depth to cover all margin calls, and you might loose $. There's also the risk of exchange going belly up and you loose ALL your coins, like MtGox BitFloor etc....

Step1: Conglomerate of miners corner the hash rate
Step2: ??
Step3: People invest in BTCina In code miner conglomerate we trust™ coin $$$ Profit $$$
vipgelsi
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October 28, 2014, 03:27:21 AM
 #29

Just another way to manipulate the price of bitcoins.

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October 28, 2014, 04:13:02 AM
 #30

It seems not a good return, 100 coins to make 0.2 coins per day... if you use those coins to buy miners, only 40 coins could make you 0.2 coins per day

But those 40 BTC are then gone, and may never see ROI let alone any profit. The 100BTC (if he's a holder anyway) are better working for him than sitting in some dumb safe wallet. Tongue

Not any bigger than the platform being "hacked"  Cheesy

Trying to invest in bitcoin and get more bitcoin back is quite old way of thinking, "investing" only applies to fiat money since fiat money lose value by itself thus you are forced to invest. For bitcoin hodling is the best investing method and almost risk free

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October 28, 2014, 04:57:04 AM
 #31

It seems not a good return, 100 coins to make 0.2 coins per day... if you use those coins to buy miners, only 40 coins could make you 0.2 coins per day

But those 40 BTC are then gone, and may never see ROI let alone any profit. The 100BTC (if he's a holder anyway) are better working for him than sitting in some dumb safe wallet. Tongue

Not any bigger than the platform being "hacked"  Cheesy

Trying to invest in bitcoin and get more bitcoin back is quite old way of thinking, "investing" only applies to fiat money since fiat money lose value by itself thus you are forced to invest. For bitcoin hodling is the best investing method and almost risk free

You are lying, holding bitcoin is the worst investment you can make in 2014, maybe in 2015 too, sell your get rich quick dream to some one new but not at here


You are new around here, and for that I am sorry.

2014 is certainly a strange year for Bitcoin, compared to the past. You have cherry-picked your interval. Simply zoom out and see that, since 01 Jan 2013, Bitcoin has made gains over 2,000%! Those kinds of returns are unheard-of in any other market. The fact that you have only recently started paying attention to the price desensitizes you to how colossal the gains have been at 300 BTCUSD.

No one's talking about getting rich quick in terms of holding versus investing. Most bitcoiners clearly do not have the patience for a normal investment timeframe. If you invest, treat it like a stock. Purchase, put it away in a portfolio, and come back only after a couple of years at least.

Malus pro bono surrepat, et bonus pro malo displiceat; fallaces enim sunt rerum species, quibus credidimus.
dropt
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October 28, 2014, 05:05:46 AM
 #32

You are lying, holding bitcoin is the worst investment you can make in 2014, maybe in 2015 too, sell your get rich quick dream to some one new but not at here

Bought at $275 a month ago, now up 27% to $350.  "Worst investment you can make in 2014".  Grin
intighet
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October 28, 2014, 05:16:46 AM
 #33

You are lying, holding bitcoin is the worst investment you can make in 2014, maybe in 2015 too, sell your get rich quick dream to some one new but not at here

Bought at $275 a month ago, now up 27% to $350.  "Worst investment you can make in 2014".  Grin

are you pretending to be a stupid person or just trying to troll? do you know what "holding" means? are you that proud of day trading?


He may have been trolling, but he makes the same point as I did, ironically. It's about time-scales.

Malus pro bono surrepat, et bonus pro malo displiceat; fallaces enim sunt rerum species, quibus credidimus.
dropt
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October 28, 2014, 05:18:32 AM
 #34

are you pretending to be a stupid person or just trying to troll? do you know what "holding" means? are you that proud of day trading?

I've been holding 5$ coins since 2012, you're the one whining about Bitcoin's performance from ATH to current.  That aside, how is buying at $275 and holding to this day (inclusive) not treating it as an investment?  If you want to cherry pick dates to make a point, so can I  Roll Eyes

PS: I don't day trade.

Quote
btw, can some one take the BTC swaps and hold it (unused) until bitcoin's price goes up then return the swaps and gain profit?

How do you envision this working?  I borrow 100BTC from a lender at $300/BTC, price goes up to $1,000,000/BTC, I still owe the lender 100BTC.

intighet
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October 28, 2014, 05:42:53 AM
 #35


yes, it's about time-scales, not "couple years" but this year or this quarter, years are too many for internet things including bitcoin


So you would rather Bitcoin double in value every week? Roll Eyes

Malus pro bono surrepat, et bonus pro malo displiceat; fallaces enim sunt rerum species, quibus credidimus.
dropt
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October 28, 2014, 07:01:55 AM
 #36

How do you envision this working?  I borrow 100BTC from a lender at $300/BTC, price goes up to $1,000,000/BTC, I still owe the lender 100BTC.
no idea but some bitfinex users are doing this, take btc swaps but not using them
They're borrowing the BTC but not selling (shorting) it.  It jacks up the daily interest rate making any new/further shorts costly to open, and/or it also removes a lot of lending offers from the pool, thus reducing the number of coins shorted on margin.  There are also a number of other reasons/things the borrower could be doing.


can it? the bubble has long gone

Which bubble?  2011,  2012,  2013 #1, or 2013 #2? And to address your other question, anything's possible.

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October 28, 2014, 10:34:46 AM
 #37


-Day three btc is at $700. Your equity is at $14.02 ($700-$666RyNinDaCleM share-$19.98three day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $120 (800*15%). But $14.02 < $120 MARGIN CALL!

Shouldn't there be  "you need to be at lest at $105 (700*15%)" ?

Anyways, it was a huge LOL, epic post, thank you for the laughs!
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October 28, 2014, 08:43:59 PM
 #38

If BTC swaps are high right now does that mean bitcoin is likely to rise in price, or the opposite?

Well, currently there are:
22,193,192.53 USD swaps
17,599.02 BTC swaps (or about $6.1MM at current price)

Say you have $333 and very confident that the current price $1000/btc  Grin  will go up. If you buy 0.333BTC and the price goes up 10% to $1100 next day, and you sell you'd have $366 ($333+$33 ) Yay but that's not good enough for you and instead you decide to leverage long. That is, you come to RyNinDaCleM and say you want to buy a full 1BTC.  RyNinDaCleM, being a loan shark that s/he is, agrees but on the following terms s/he will buy and hold it for you, s/he wants to be paid 1% per day and asks for Initial Margin 3:1 (33%) and warns that Maintenance Margin is 15%. Blah blah STFU you agree and hand him $333 (33% from $1000 as Initial Margin) he puts in $666 of his own money and buys full 1BTC and says he'll keep it for safekeeping you go Whateve's. Now you prop your eyes open with tooth picks and glue yourself to a monitor looking at BTC price charts expecting it to go up. You've entered a leveraged long position.
Outcomes:
A-Day later, price goes up 10% cool!! You ecstatically run to RyNinDaCleM's place tell him to sell that 1BTC and give you your money. He hands you $427.34 ($1100 - $666money he put in - $6.66 his 1%swap interest for day). You come back home and find your girlfriend with another model looking chick having a pillow fight naked on your bed. Cool much better than $366 eh?

B-Day later market moves against you $100 so btc is at $900 now. You kick the cat, lock the dog outside, but hang in there after all you got mad trader skillz and confident that the price MUST go up so must be just a glitch in the matrix. Next day market moves against you again and BTC is at $800 now. You call up your girlfriend and say that she needs to loose few kilos/pounds, call up your mom and say you always hated her cooking. But stick with your btc. After all BTC always rebounds, right? It always does. RIGHT!?! Day three, you wake up and find puke all over your keyboard, empty bottle of vodka and a really fat "thing" passed out in your bed. You really hope it's a chick but can't tell and too afraid to check as to not wake her/him up. You check BTC and it's trading at $700. Damn must be that full moon oh well BTC is only down 30%. You look at the chart and conclude that the pterodactyl's nose points to a trend reversal tomorrow. But phone rings and it's RyNinDaCleM saying it's a margin call and he just sold your BTC and come pick your $14.02 up . WTF thought we were cool bro? Phone ring wakes up the fat dude that was passed out on your bed, he give you a compliment on you pretty mouth while he pukes all over your bed/carpet.  Angry WTF just happened!?!

Well, your equity (your money) started off at $333. 15% Maintenance Margin at price of $1000 is $150 so you're well over that with your $333
-Day one btc is at $900. Your equity is at $227.34 ($900-$666RyNinDaCleM share-$6.66one day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $135 (900*15%). $227.34 > $135 so you're good.
-Day two btc is at $800. Your equity is at $120.68 ($800-$666RyNinDaCleM share-$13.32two day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $120 (800*15%). $120.68 > $120 barely made it.
-Day three btc is at $700. Your equity is at $14.02 ($700-$666RyNinDaCleM share-$19.98three day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $120 (800*15%). But $14.02 < $120 MARGIN CALL!

Shorts are the other way around where you borrow BTC and sell it right away for $ in hopes that it'll go down so you can repurchase it later at a lower price. Don't have time to write up an example for that today  Smiley

TL;DR lots of USD swaps (longs) means a lot of people holding BTC with borrowed money in hopes that BTC will go up so they can sell and pay back the $$$. But they're paying interest daily, and if market goes down too much they might have to sell their BTC before loosing everything, or if it goes down too much the BTC might be sold automatically by exchange in a margin call. Which might cause a domino effect. Price falls, person 1 gets margin called and his coins are sold on the market, causing the price to drop even more, now person 2 gets margin called and now his coins are market sold driving the price even further down now person 3 is in trouble etc...

BTC swaps  (shorts) are the other way around, people borrowed coins, sell right away and sit on fiat. Eventually they have to buy the coins to give them back (close their short). They obviously hope to rebuy at a lower price. You borrowed a coin from me at $1000, price goes up to $5000 but i don't care and want my coin back, so you're forced to buy at the market price. Forcing price up, and possible margin call on other shorts driving the price even higher...

thank you. now i understand the madness of the trolls here much better.
Diabolicus
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October 28, 2014, 08:58:50 PM
 #39

*snip* epic explanation *snip*

Great, even I understood that :-D
Thanks!
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October 28, 2014, 10:19:30 PM
 #40

*snip* epic explanation *snip*

Great, even I understood that :-D
Thanks!

Yeah, haven't posted for a while but definitely enjoyed that read. Nice.
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