The main problem with this is that GLBSE is not JUST a stock exchange, but a stock exchange, broker and depository institution. GLBSE holds everything. They will probably object.
This is essentially all about leverage. Just paying a monthly fee of 1% you could control 10,000 bitcoins with 300 bitcoins for 3 months. If your asset drops 7% you are out 700 bitcoins + 300 in fees after 3 months. What do you do then? This presents an extreme risk to the lender. It's easy to get in so deep.. lets just say real world brokerages and banks worth billions have had to close their doors because they did deals like this without properly calculating or monitoring client's leverage via margin requirements.
If GLBSE offered this service (margin accounts) you would need to sign an agreement that the GLBSE can step into your account and execute trades for you at any time. That's the only way this could ever work. So if I were to vendor brokerage services to you, then you would have to have an account with me and you would be issued margin on that account. So lets say you hold 1,000 shares of gigamining "through me". That means I hold them and pay you the dividend when *I* get it. Once we have that set up, I'll say ok, I'll issue you a 90% margin requirement. I'll loan you the value of stock up to 90% of the value of your account with me. Then I'd charge you 1% on that. Would you trust me to do that for you?
From Nefario's point of view it looks like an asset swap, so I don't see how this would be against TOS, but I would read it again before actually doing this.
I don't see why GLBSE would object, I'd like to hear Nefario's stance, but it seems GLBSE can safely ignore it completely. It will just be someone sending an asset as far as they are concerned. They never claim to enforce this sort of deal and I don't think anyone would expect them to. Maybe they could (if they don't say something that covers it already) explicitly state that they are not responsible for any promises made by third parties.
I didn't intend this as leverage for myself, but that is a good point. If someone is thinking in terms of "I know I'm right about the price going down so I just need to cover the fee." they are a terrible person to do this type of business with.
I think using a cap like I offered is a reasonable thing. If the maximum loss is both made explicit and the lender determines the borrower is good for that amount (or at least factors the chance of default in). In my offer the most I could lose is 2000x10xcurrent price which is a bit under 2000BTC. I don't intend to actually expose myself to that. Perhaps I'll only sell half below 1.50 and some not until 3. Point being that I don't actually expose myself to the max loss until and unless I actually sell (and not the -max- loss unless I sell them at 0, which I don't intend on doing).
Lower factor buy out clauses seem like a good idea. Ideally you would pick the point where the lender thinks it is so unlikely to reach that they aren't giving up hardly any expected value. For a lot of thing this might be as low as 2x.
Another thing we could explore is swaps. They could be used to reduce the one sidedness of the trust issue which might be good in some cases.
