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Author Topic: Mt Gox.. Please raise limits for Dark Pool trading.  (Read 2341 times)
eof
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May 17, 2011, 04:01:50 PM
 #1

I don't particularly like the dark pool; but probably a lot of people *do* like it, both buyers and sellers, so I will not make a fuss.

However, I think 1k is far too low to use the darkpool now. 

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AbeSkray
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May 17, 2011, 06:18:44 PM
 #2

However, I think 1k is far too low to use the darkpool now. 

Please elaborate.
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May 17, 2011, 06:26:38 PM
 #3

However, I think 1k is far too low to use the darkpool now. 

Please elaborate.

mtgox says that orders of over $1000 usd can be in the dark pool. That's only 134 BTC nowadays.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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May 17, 2011, 06:31:46 PM
 #4

When mtgox introduced the darkpool, you needed to do an order of 10k+ BTC to be in the dark pool.

It seems to me the whole point of the darkpool is to allow trades that are orders of magnitudes larger than 'normal' trades to not effect 'normal' trades.

Months ago, 1k was a huge order on mtgox.  It is no longer a huge order, it is a completely normal sized order which we see many, many times a day.
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May 17, 2011, 06:40:14 PM
 #5

I don't get the whole dark pool order thing, much less why it should start at some amount of USD.

All this does is making the market depth useless and put small traders at a disadvantage. This has been discussed before, and I thought MagicalTux wanted to replace them with iceberg orders. But that never happened, for whatever reason.

I don't think there's a reasonable amount of money starting from which one should have an advantage. That's just weird, so it's not too bad if the value is low.
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May 17, 2011, 06:46:38 PM
 #6

As I see it, the Dark Pool was an informal immediate Future's Market. It allowed volume discounts to take place. And one should get volume discounts, however, those numbers should never be hidden, they should be publicized. The misnomer of don't let it affect the swings of the market, means, lets take advantage of the market with volume discounts.

On an "Exchange" information should be easily retrieve and available. Not in a 'DarkPool'.

With that being said, DarkPools will always exist "off the exchange", and that is fine.

As far as the original, question: Raise Limits for Dark Pool Trading.  I believe MagicalTux is trying very hard to stay as close to a "legal limit" as possible. I don't see the Limit being raised, just Dark Pools becoming less relevant.

Personally, I don't think there should be "DarkPools" on an Exchange. Even IRL, companies use a ECN network to trade off the market, not on the market.


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barbarousrelic
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May 17, 2011, 08:16:20 PM
 #7

All this does is making the market depth useless and put small traders at a disadvantage.

Yup. They should be eliminated, and all orders should require a CAPTCHA to eliminate trading bots. My humble opinion.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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May 17, 2011, 08:23:21 PM
 #8

I also support eliminating them entirely.

I am not sure what the 1000 limit has to do with legal ramifications; but i am not aware of it.
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May 18, 2011, 04:08:45 AM
 #9

All this does is making the market depth useless and put small traders at a disadvantage.

Yup. They should be eliminated, and all orders should require a CAPTCHA to eliminate trading bots. My humble opinion.

Wow, do you hate all conveniences? Should we shout orders to each other? Why on earth would you want to tie humans to button clicking?

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May 18, 2011, 10:46:54 AM
 #10

With that being said, DarkPools will always exist "off the exchange", and that is fine.

Why is that fine? Having them off-exchange is also "elitism", just another form of it, you'll need some time and knowledge instead.
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May 18, 2011, 01:53:24 PM
 #11

I use dark pools all the time.  Given that they exist, I see it as in my personal self interest to use them, so that others don't undercut me by a small amount.

That doesn't mean I think they should exist.  I use them because I know others do to, but I do think the free market would be better if it was more transparent.

So... Magical Tux: Don't assume because you see dark pools as being used a lot that means all those users think they should exist.  

And for the record: I *don't* think the limits should be raised.  I think it should be an all-or-nothing thing -- either keep them as they are or get rid of them completely.
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May 18, 2011, 02:27:45 PM
 #12

With that being said, DarkPools will always exist "off the exchange", and that is fine.

Why is that fine? Having them off-exchange is also "elitism", just another form of it, you'll need some time and knowledge instead.

You kidding me? Trading off of a market is elitism?

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May 18, 2011, 06:58:17 PM
 #13

Disagree.

A thousand dollars worth of Bitcoins is still a thousand dollars worth of Bitcoins.  The $/BTC rate is going to fluctuate (as we've seen, a lot!) ... a $1000 limit for dark pool orders seems fine to me.

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May 19, 2011, 12:37:21 AM
 #14

What about a third option for direct trades with specific individuals (outside any sort of automatically matched market)? While you can send Bitcoins and USD via the Send Money feature, there's no guarantee of mutual payment. I'd propose a sort of mutual Bitcoin/USD escrow service for trades, e.g.:

  • Alice doesn't trust Bob and Bob doesn't trust Alice, but Alice wants to buy 10000 Bitcoins for $7 apiece from Bob
  • Alice requests the trade on MtGox
  • Bob accepts
  • If Alice has at least 70000 USD and Bob has at least 10000 Bitcoins, MtGox performs the trade in a single atomic transaction (for a small fee probably)
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May 19, 2011, 09:24:37 PM
 #15

That kind of "freedom of association" trading is something I have had people ask for a lot too. Freedom to pick which offers to go for. Admittedly part of why I see a lot of requests for that is I am very often looking at in-game uses of currencies thus some players do not like the idea of financing enemies or non-allies.

Another request I get a lot is for lump sum offers, since if for example you want 50,000 somethings to buy a battleship and 49,999 will not buy it you miight prefer to play around in other ways with your resources instead of tying them up in not quit enough somethings to actually buy a product you want. So people often ask me for ability to offer to buy a certain number and no less than that, or to sell a certain number and no less than that.

I do however see potential for abuse in such setups, since for example a person could keep moving the scale of their offer up and up and up to ensure it is always actually just out of reach.

(For example if I know no-one in all the galaxies, or maybe not even all of them combined, can raise a hundred million deuterium so I post an offer of lots and lots of bitcoins for one hundred million *and no less* deuterium to try to psych up the value of deuterium whilst knowing I will never actually have to spend any bitcoins on the stuff...)

Similarly trade ith who I wish could also be abused especially by a player runing multiple accounts. They could pay themselves - but under another name/account - and *only* themselves, high prices in bitcoins for deuterium, again to drive up the price of deuterium, again without ever really having to fork out any actual bitcoins...

-MarkM-

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May 19, 2011, 10:11:00 PM
 #16

copy edited to smooth reading.  (hope you don't take offense).


Quote
That kind of "freedom of association" trading is something I have had a lot of people ask for. Freedom to pick which offers to go for. Admittedly, part of why I see a lot of requests for that are in-game uses of currencies, as some players do not like the idea of financing enemies or non-allies.

Another request I get a lot is for lump sum offers. Say for example, you want 50,000 somethings to buy a battleship and 49,999 will not buy it; you might prefer to play around with your resources in other ways than for waiting for the battleship to cost 49,999. So, people often ask me for the ability to buy a certain number, and no less than that, or, to sell a certain number and no less than that.

I do however see potential for abuse in such setups; for example a person could keep moving the scale of their offer up and up and up to ensure it is always actually just out of reach.

(For example if I know no-one in all the galaxies, or maybe not even all of them combined, can raise a hundred million deuterium so I post an offer of lots and lots of bitcoins for one hundred million *and no less* deuterium to try to psych up the value of deuterium whilst knowing I will never actually have to spend any bitcoins on the stuff...)

Similarly choosing who you trade with could also be abused, especially by a player running multiple accounts. They could pay themselves - but under another name/account - and *only* themselves, high prices in bitcoins for deuterium, again to drive up the price of deuterium, again without ever really having to fork out any actual bitcoins...

-MarkM-

I really appreciate your transparency here.  If you're into it, a way of avoiding abuse in the "freedom of associating" trading is by keeping the transactions that happen "off the exchange" off the ticker; as that should keep them from having an effect on prices.

As far as the lump sum request; what is a scenario that might happen with bitcoin?  Someone putting in a 7M BTC @ $10/each type order in an attempt to push prices up to 10?  Probably there is something more subtle I am missing..
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May 19, 2011, 10:47:24 PM
 #17

"As far as the lump sum request; what is a scenario that might happen with bitcoin?  Someone putting in a 7M BTC @ $10/each type order in an attempt to push prices up to 10?  Probably there is something more subtle I am missing.."

Okay, it is a little less likely an occurrence with bitcoins and fiat currency than it is with weird/unusual/rare currencies, possibly even including currencies such as World of Warcraft Gold, Linden Dollars, or even rounds of silver, bars of gold,ice cream cones or pizzas.

I was thinking of these weird things mostly. Like lets say I want to buy an automobile that I can buy on Craig's List for X number of item Y or alternatively can buy on eBay for A number of item B.

Obviously I want either X number of item Y or A number of item B, unless I am prepared to go into the possibly horrendous can of worms that might be involved in trying to convert some number of item B into some number of item Y or vice versa.

Now with highly liquid easy to access markets, such as in the case of item B being USD and item Y being GBP or CAD, I can quite likely face the "can of worms" of getting a bunch of one and a bunch of the other and then converting one or the other so I end up with the desired amount of one or the other, which one that ends up being becoming the deciding factor in whether I buy from the Craig's list seller or the eBay seller.

But as soon as item B and item Y are not so easy to "convert" ("exchange") as USD, CAD, GBP and such, I can face challenges I simply do not want to face.

I would then much prefer to offer to buy A number of item B for bitcoins OR X number of item Y with bitcoins but NOT to want any less than A of B nor any less than X of Y.

Maybe item B is silver rounds, because the eBay guy likes to deal with that lakota bank place, and item Y is World of Warcraft gold, because that is what the guy on Craig's list is asking for. Do I want to try to figure out how to convert silver rounds to world of warcraft gold or vice versa?

Or would I prefer to simply offer bitcoiners so many bitcoins for exactly A number of silver rounds OR exactly X number of world of warcraft gold, with a sorry I will not buy less or more of either, I need this many of those OR that many of these, no fractional parts, fractional parts are frankly more trouble than I want to deal with. If you can't give me enough of what I need to buy what I want to buy then I don't need any, because no lesser amount is going to buy me what I want.

Basically I guess in a totally liquid market the apparent need for this maybe goes away.

Oh but wait, suppose I want to own 51% of the shares of a company. Is it not then reasonably to say I want enough to get that percent and any less is pointless, as all it will do is make it actually harder to get the last little bit that would put me in control of the company? I want control of the company or I will buy some other company instead, one that I *can* buy control of? If you cannot sell me enough IBM I dont want IBM, how about Microsoft, can you sell me enouh of those? No? Then how about penny stocks, got enough of any of those that I'd get control by buying them?

Is that maybe a real life case where buying a certain number and no less makes sense?

-MarkM- (If you can't sell me enough bitcoin to buy a Cadillac I'll instead buy enough GBP to buy a Rolls?)


(In games it can be things like I want EITHER 2000 metal to build a metal storage facility OR 1800 metal and 500 crystal to build a crystal storage facility, I want to actually build something so I need these amounts not fractions of them.)
 

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May 20, 2011, 01:18:31 AM
 #18

Yes, I do see now how that would effect some subset of real world scenarios, but I still don't see a situation in which the lump-sum-only requests would have a negative effect on the market?
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May 21, 2011, 11:29:01 AM
 #19

All this does is making the market depth useless and put small traders at a disadvantage.

According to magicaltux, iceberg orders will be implemented as discussed here: http://forum.bitcoin.org/index.php?topic=5564.0;all

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May 22, 2011, 05:13:02 AM
 #20

also according to him darkpools will remain, but darkpool+normal will go away

(12:55:16 AM) gdoteof_home: MagicalTux: are dark orders going away in lieu of iceberg orders?  or are they here to stay?
..
(12:55:44 AM) MagicalTux: gdoteof_home: dark+normal will disappear
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