Price Volatility for Reserved Exchanges.

[Smack That Ace]

Hello,

I am in the process of setting up a Reserved/OTC exchange and have a question regarding two things.

1) Price Volatility.

How does a reserved exchange holding 15 to 30 Btc for selling to their customers with very minimal buying hedge against price volatility.
Lets say we buy 30 btc at 300 and the next day when an order comes in for 10 btc and the price is at 290, how is the exchange supposed to recover from the price drop.
Charging extra money from customers is not an option as we have kept a strict no premium policy.
If the price was going up, it wouldn't really matter as we would just be making a profit on the gain in price while holding on to the reserves.

2) Liquidity.

How is an exchange which has more customers buying bitcoin cover liquidity.
Is there a way to buy bitcoin below market price ?
Otherwise what is the most effective way to obtain bitcoin for our customers without charging insane premiums from them.

Any advice would be appreciated.

Regards

Duke

[1715655444]

1715655444

[conizer14]

I'm really looking forward to the input on these subjects as I'm interested in loss protection methods.

[Smack That Ace]

Yes.
I think before starting any bitcoin related business. These are the two very important things that an entrepreneur should look at.

Unfortunately there is no feedback about this yet thus showing that either people are facing the same issues or this is a subject not many have experience about.

Also my business is focused on bitcoin remittance thus making it even more important.

Regards

Duke

[conizer14]

What is the lead time for order to delivery you hope to be able to supply on your sales?

[conizer14]

In fact, if you want to shoot some ideas between us.... let me know and PM me your Skype and we can use IM on there if you wish

[Smack That Ace]

What is the lead time for order to delivery you hope to be able to supply on your sales?

Really Fast if not instant.

To operate as an OTC we need to have reserves.
This reserves will help with order fulling.
Currently speaking to a few dealers i have realized the potential is much more then 10 or 20 btc outgoing per day.
In coming is still something i have not been able to deal with.

Regards

Duke

I have sent you my skype details.

[DiamondCardz]

Yeah, this is a major problem with OTC exchanges. If your fees aren't large enough to cover possible price fluctuations, you're going to have issues. And Bitcoin can be very, very volatile sometimes. 

[Smack That Ace]

Yeah, this is a major problem with OTC exchanges. If your fees aren't large enough to cover possible price fluctuations, you're going to have issues. And Bitcoin can be very, very volatile sometimes. 

Very true but i always wonder how exchanges like Coins.ph or coinjar manage this issue who have almost instant exchange time as soon as the order is put in.

I wouldnt say coinbase because they usually make people wait 4 days for their coin.

Duke!

[newIndia]

Yeah, this is a major problem with OTC exchanges. If your fees aren't large enough to cover possible price fluctuations, you're going to have issues. And Bitcoin can be very, very volatile sometimes. 

Very true but i always wonder how exchanges like Coins.ph or coinjar manage this issue who have almost instant exchange time as soon as the order is put in.

I wouldnt say coinbase because they usually make people wait 4 days for their coin.

Duke!

There are instances where Circle returned money because of price jump after the order was locked. Just have it written in your ToS, that u can do so. As long as you are returning money/coin without any commission no one can charge you.