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Author Topic: https://bitdaytrade.com Bitcoin Gold & Commodities margin trading  (Read 17342 times)
Ichthyo
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July 19, 2012, 02:09:54 PM
 #101

want to report another small glitch or shortcoming

The charts section: when you enter that page, the drop-down box shows "all time" selected. But the charts arctually display the "last day".

To verify this: select "last day" -> nothing changes. select "all time" -> voila. From that point on, drop-down and state are in sync.


Further, somewhat related to the timestamp issue reported above: can you please add a more meaningful display on the horizontal (time) axis? You should format the numbers in a way to make clear how to read them (e.g. "12:00" instead of just "12"). Moreover, you should indicate the unit of measurment, especially on the "all time" display. And, of course, the time display should'nt wrap to negative numbers left of the zero point.



Please take that with a grain of salt. The Charts, as they stand now, are a nice-to have ("oh, they have a charts section too"). They're an eye catcher but aren't very useful. It is nice to have BTC and gold rate right above one another though. But the rates display, especially on last day, isn't accurate enough to judge any movement or to get the highs and lows precisely.
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Ichthyo
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July 20, 2012, 01:30:16 AM
 #102


Hello Bitdaytrade team,

would you mind clarifying the following details regarding the "finnancial mechanics" of your site?

What is the currency account actually?
When I just deposit some BTC into my Bitdaytrade account, without opening any trading position -- what happens then actually?
  • are these BTC just sitting in some wallet on your site?
  • or are you selling them for USD right away and hold a constant USD balance somewhere?


How are interest rates actually handled?
On your frontpage, you display some interest rates for holding open long positions.
  • What does "weekly" mean precisely?
    • at what point in time do you charge them
    • how do you treat positions open only for a fraction of a week
  • are the displayed interest rates established dynamically? How precise is the actual calculation? Right now, you display "3%" for an open gold long position worth $10000. But 300 / 7 = 42.857142857, and not "42.23" as displayed. Thus, what rate are you actually using?
  • Are the actual interest payments displayed anywhere within my account? (e.g. in the history?). I couldn't find any indication.
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July 20, 2012, 08:23:16 AM
 #103

What is the currency account actually?
When I just deposit some BTC into my Bitdaytrade account, without opening any trading position -- what happens then actually?
  • are these BTC just sitting in some wallet on your site?
  • or are you selling them for USD right away and hold a constant USD balance somewhere?
Bitcoins that you deposit remain in BTC form. Gold positions are denominated in USD but settled in BTC equivalent when liquidated. For example, if you buy a gold contract at $1600 and sell it at $1700, your profit is $100, and if at liquidation time a BTC is $8, you will have 12.5 BTC added to your balance.

How are interest rates actually handled?
On your frontpage, you display some interest rates for holding open long positions.
  • What does "weekly" mean precisely?
    • at what point in time do you charge them
    • how do you treat positions open only for a fraction of a week
  • are the displayed interest rates established dynamically? How precise is the actual calculation? Right now, you display "3%" for an open old long position worth $10000. But 300 / 7 = 42.857142857, and not "42.23" as displayed. Thus, what rate are you actually using?
  • Are the actual interest payments displayed anywhere within my account? (e.g. in the history?). I couldn't find any indication.
The interest mechanism is still being worked on, I don't believe it is now actively charged. The idea is to have the interest deducted from your account on an hourly basis, so that the total per week is the displayed percentage.

For now the weekly values are hardcoded but this will eventually be replaced by a dynamic system that adjusts to demand.

There's currently a mistake in the displayed daily/hourly values due to usage of a calculation that is not applicable for this situation, it will be corrected.

There will likely be some form of summary of the interest payments.

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July 20, 2012, 10:18:28 AM
 #104

Im having trouble withdrawing my tiny amount of coins...

I get a processing window popup... and nothing else.
Ichthyo
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July 20, 2012, 12:17:58 PM
 #105

What is the currency account actually?
When I just deposit some BTC into my Bitdaytrade account, without opening any trading position -- what happens then actually?

Bitcoins that you deposit remain in BTC form. Gold positions are denominated in USD but settled in BTC equivalent when liquidated. For example, if you buy a gold contract at $1600 and sell it at $1700, your profit is $100, and if at liquidation time a BTC is $8, you will have

thanks for your explanations.

So, to expand on that question and your explanation, where does the BTC/USD rate come into play?

My understanding is as follows: BTC deposit -> denomination in USD, based on the current rate  -> available margin.


Now, lets assume for example, if I open riskless positions in the gold market, i.e. open a long and a short in such a way, that they cancel out each others effect completely (both would need to have the same closing price). And lets assume further, that I use all the available margin for doing so. (opening such a position incurs 2 times the spread, so that is what I pay for that kind of insurance per week)

Given that construction, to what extend is my BTC position now hedged?
For example, if the BTC rate drops considerably, while I'm "in" such a riskless gold position?
Would I get a margin call? Or is the current margin based on the current value of my account, which -- as assumed -- should be completely anchored in the gold market now?

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July 20, 2012, 12:56:31 PM
 #106

Im having trouble withdrawing my tiny amount of coins...

I get a processing window popup... and nothing else.
If you're still having this problem please contact info(at)bitdaytrade.com.

My understanding is as follows: BTC deposit -> denomination in USD, based on the current rate  -> available margin.
Right.

Now, lets assume for example, if I open riskless positions in the gold market, i.e. open a long and a short in such a way, that they cancel out each others effect completely (both would need to have the same closing price). And lets assume further, that I use all the available margin for doing so. (opening such a position incurs 2 times the spread, so that is what I pay for that kind of insurance per week)

Given that construction, to what extend is my BTC position now hedged?
For example, if the BTC rate drops considerably, while I'm "in" such a riskless gold position?
Would I get a margin call? Or is the current margin based on the current value of my account, which -- as assumed -- should be completely anchored in the gold market now?
The ability to have opposing positions will soon be disabled, because there's not much point in it - what you would profit on one you would lose on the other. Opening a short position when you already have a long one will instead liquidate part of the long position.

You will be force-liquidated if your net value (account balance translated to USD + Profit/loss from current positions) drops below 1% (the current maintenance value for gold) of your position (position size multiplied by the current price of a single contract).

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July 20, 2012, 02:02:04 PM
 #107

I opened a position yesterday. It's gone. Again?!?

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Ichthyo
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July 20, 2012, 07:57:58 PM
 #108

The ability to have opposing positions will soon be disabled, because there's not much point in it - what you would profit on one you would lose on the other. Opening a short position when you already have a long one will instead liquidate part of the long position.

Oh no!

please don't remove one of your distingushing features. We shouldn't look on the balance and gains solely, its also about risk.

There is quite a significant difference: if you close out a position, typically with a stop-loss order, the whole position is gone. To the contrary, when you have two oposing positions, one created by a stop loss, you're protected for the moment, but you are still free to decide which position to retain, when you come back.

Obviously, there wouldn't be a difference for someone sitting all the time in front of the trading app and whatching the rates move. Then you'd use stop losses only as a safety guard, to protect against catastrophic events.

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July 20, 2012, 08:25:37 PM
 #109

..... And lets assume further, that I use all the available margin for doing so.

Given that construction, to what extend is my BTC position now hedged?
For example, if the BTC rate drops considerably, while I'm "in" ....
Would I get a margin call? Or is the current margin based on the current value of my account, which -- as assumed -- should be completely anchored in the gold market now?

You will be force-liquidated if your net value (account balance translated to USD + Profit/loss from current positions) drops below 1% (the current maintenance value for gold) of your position (position size multiplied by the current price of a single contract).

Probably the key question here is: at which point exactly does the BTC / USD rate come into play? When exactly does "translated to USD" happen. Because the BTC rate can move. That's the point, it's about risk.

So, please, what model is implemented by Bitdaytrade?

Model-A: You use the BTC from the currency account to really buy into the gold market. From that point on, the value of the account and thus the margin is determined by the valuation of these positions in the gold market. The BTC rate can move anywhere, because its irrelevant at that point. The BTC are sold. When the gold position is closed, we buy BTC back. In case Bitdaytrade implemets this model, then it would be a real derivative: you'd allow your customers to swap the cash flows and risks of the two markets.

Model-B: The customer deposits BTC, and that is where the value and the risk stays. The customer can than bet on the gold rate, but the value of the account (and the margin) is still tied to the BTC value. When the BTC/USD rate drops, the customer gets a margin call. This behaviour would prove that in this case: either (a) no real trade on the gold market happened, or (b) the bitdaytrade platfrom carries the risk of their speculative gold positions not matching the value of the BTC positions.


You see, this question is important. Especially for the customer judging the counterparty risk of trusting his money to your platform.
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July 21, 2012, 06:10:41 PM
 #110

There is quite a significant difference: if you close out a position, typically with a stop-loss order, the whole position is gone.
Currently there is no ability to do a stop-loss order, so a feature that is only relevant to stop-loss orders is moot for now. For manually closing positions, you can liquidate part of a position, you don't have to liquidate it entirely.

Probably the key question here is: at which point exactly does the BTC / USD rate come into play? When exactly does "translated to USD" happen. Because the BTC rate can move. That's the point, it's about risk.

So, please, what model is implemented by Bitdaytrade?

Model-A: You use the BTC from the currency account to really buy into the gold market. From that point on, the value of the account and thus the margin is determined by the valuation of these positions in the gold market. The BTC rate can move anywhere, because its irrelevant at that point. The BTC are sold. When the gold position is closed, we buy BTC back. In case Bitdaytrade implemets this model, then it would be a real derivative: you'd allow your customers to swap the cash flows and risks of the two markets.

Model-B: The customer deposits BTC, and that is where the value and the risk stays. The customer can than bet on the gold rate, but the value of the account (and the margin) is still tied to the BTC value. When the BTC/USD rate drops, the customer gets a margin call. This behaviour would prove that in this case: either (a) no real trade on the gold market happened, or (b) the bitdaytrade platfrom carries the risk of their speculative gold positions not matching the value of the BTC positions.
I thought it was clear from my description that it's model B. Your conclusion doesn't follow. When you buy a gold contract on BDT, BDT buys a gold contract on another market with its USD reserves; when you liquidate it, BDT liquidates it making a USD profit/loss. You will also have a profit/loss, added to your BTC balance based on the BTCUSD rate at the time, and BDT will buy/sell this amount of bitcoins on the BTC market to maintain its BTC position.

This is all of course how it should happen in theory, I don't know if it's implemented yet. I'd like to remind that I'm not an official spokesperson for the Bitdaytrade platform itself, I just share what I know based on my discussions with Alberto.

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July 24, 2012, 07:21:51 AM
 #111

If you leave an LONG open position overnight, the 3% carried interested is calculated over the total value of your position in USD and converted to Bitcoin, then charged to your account. If you have a LONG position for 0,01 contract at 1.570,30 it means you are charged 0,47109 for each night you keep the position open.
See calculation (1.570,30*0,01)*0,03) = 0,47109 USD

EDIT : Carried interest charge is not being enforced yet.

Over night? What timezone?

Can you give us a heads-up before you enforce this? I'm trading on a crazy 50:1 leverage and this would eat up my funds over night ;/

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July 25, 2012, 07:57:33 AM
 #112

I have some more questions:

@meni: are you helping bitdaytrade in any way? It sounds like you know more than can be inferred from public knowledge.

Can someone help me out with some calculation? I want to go long gold. Let's say I want to buy 1 contract. Now let's assume 1530 is the bottom and if it drops below that I want to accept liquidataion. With a 50:1 leverage, how many bitcoins do I have to put into the currency account if I buy the contract at, say, 1590?

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July 25, 2012, 08:46:05 AM
 #113

@meni: are you helping bitdaytrade in any way? It sounds like you know more than can be inferred from public knowledge.
Yes, I'm consulting for Alberto so I have some knowledge about the current and future way things are handled (some of which I've put him up to), but the decisions and implementation are always Alberto's.

Can someone help me out with some calculation? I want to go long gold. Let's say I want to buy 1 contract. Now let's assume 1530 is the bottom and if it drops below that I want to accept liquidataion. With a 50:1 leverage, how many bitcoins do I have to put into the currency account if I buy the contract at, say, 1590?
If you buy a contract at 1590 then when it reaches 1530 you are at $60 loss. The current maintenance for gold is 1% so to be force-liquidated at that point you need your net value to be 1%*1530=$15.3, which means that your balance should be $60+$15.3 = $75.3. If 1BTC = $8.5 this means your deposit should be 8.86 BTC.

Note that the deciding BTC rate is at the time of liquidation, not when opening the position. And this is all assuming everything works properly, which still needs to be tested.

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July 25, 2012, 10:03:30 AM
 #114

@meni: are you helping bitdaytrade in any way? It sounds like you know more than can be inferred from public knowledge.
Yes, I'm consulting for Alberto so I have some knowledge about the current and future way things are handled (some of which I've put him up to), but the decisions and implementation are always Alberto's.

This increases my trust in bitdaytrade.

Can someone help me out with some calculation? I want to go long gold. Let's say I want to buy 1 contract. Now let's assume 1530 is the bottom and if it drops below that I want to accept liquidataion. With a 50:1 leverage, how many bitcoins do I have to put into the currency account if I buy the contract at, say, 1590?
If you buy a contract at 1590 then when it reaches 1530 you are at $60 loss. The current maintenance for gold is 1% so to be force-liquidated at that point you need your net value to be 1%*1530=$15.3, which means that your balance should be $60+$15.3 = $75.3. If 1BTC = $8.5 this means your deposit should be 8.86 BTC.

Note that the deciding BTC rate is at the time of liquidation, not when opening the position. And this is all assuming everything works properly, which still needs to be tested.
[/quote]

Thanks for the calculation and heads-up.

now one question remains to Alberto: when will interest started to be charged? Being able to borrow at 0% is too good to be true (except if you're a bank, then it's normal I guess).

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July 26, 2012, 08:10:25 AM
 #115

Another screwup:



yesterday I had 5 long position of 0.1 contracts each at around 1588 to 1602 and 2 shorts of 0.05 contracts each, one at about 1569 and one somewhere in the 1580s.

all positions are gone and as you can see in the screenshot, my currency account (which had BTC 10.5x before the screwup) is insanely negative.

EDIT: damnit, now we're having a nice rally Sad

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July 26, 2012, 08:15:46 AM
 #116

Another screwup:

yesterday I had 5 long position of 0.1 contracts each at around 1588 to 1602 and 2 shorts of 0.05 contracts each, one at about 1569 and one somewhere in the 1580s.

all positions are gone and as you can see in the screenshot, my currency account (which had BTC 10.5x before the screwup) is insanely negative.
I've seen this happen before, it looks like the positions were liquidated at a price of 0, which causes a huge loss bringing your balance to the negative. Alberto was supposed to fix this, I'll check with him soon for updates.

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July 26, 2012, 08:47:26 AM
 #117

Another screwup:

yesterday I had 5 long position of 0.1 contracts each at around 1588 to 1602 and 2 shorts of 0.05 contracts each, one at about 1569 and one somewhere in the 1580s.

all positions are gone and as you can see in the screenshot, my currency account (which had BTC 10.5x before the screwup) is insanely negative.
I've seen this happen before, it looks like the positions were liquidated at a price of 0, which causes a huge loss bringing your balance to the negative. Alberto was supposed to fix this, I'll check with him soon for updates.

Thanks.

Does Alberto not frequent this thread any more? I'm a bit taken back by the lack of official communication.

I hope he can fix the issue and minimize screwups like this... I know it's beta and that's ok as long as he keeps repairing things. At least there should be communication, though.


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July 26, 2012, 09:03:43 AM
 #118

Another screwup:

yesterday I had 5 long position of 0.1 contracts each at around 1588 to 1602 and 2 shorts of 0.05 contracts each, one at about 1569 and one somewhere in the 1580s.

all positions are gone and as you can see in the screenshot, my currency account (which had BTC 10.5x before the screwup) is insanely negative.
I've seen this happen before, it looks like the positions were liquidated at a price of 0, which causes a huge loss bringing your balance to the negative. Alberto was supposed to fix this, I'll check with him soon for updates.

Thanks.

Does Alberto not frequent this thread any more? I'm a bit taken back by the lack of official communication.

I hope he can fix the issue and minimize screwups like this... I know it's beta and that's ok as long as he keeps repairing things. At least there should be communication, though.
I had suggested to Alberto to communicate more regularly and he said he would. I'll remind him of this if there's need.

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July 26, 2012, 11:06:47 PM
 #119

I just changed my account email and enabled google auth and now my account is gone.

<>

I had 0.95 btc in there and 0.04 and 0.02 in buy positions.

EDIT: If the position liquidates that's fine . Still would like my maintenance balance though ..

EDIT: Created another account and then added google auth. It did the same thing to that account also. Seems that the site looses contact with the session data when google auth is used ..

EDIT: my old email is enrolled in the google authenticator but when I tried to enroll the new email it said already created. So basically all you need to do is revert this account to the old email and I should be able to login fine.

EDIT: Thanks! .. That worked great! and my position survived!

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July 27, 2012, 12:24:16 AM
 #120

Sorry for all troubles guys, i am very busy with a day job lately, i hope to be able to switch to bitcoin projects full-time soon.
The new version of the site which will allow bitcoin margin trading is ready and i plan to deploy it for all customers,except for bitcoin trading, until we complete a brief preliminary testing phase. All bugs that presented during these days are probably related to some changes in the code that reflected on the production machine. The new version, which will be deployed tomorrow, should have most issues fixed and offer some stability.
Interest charging started 7 days ago, and you will find an history of the interest charged on the new version of the site.
Apologizes for all inconveniences and thank you for your invaluable feedback.

Alberto

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