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Author Topic: [GLBSE] Gauging interest in silver/gold bullion futures  (Read 932 times)
BitSense Informatics
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July 13, 2012, 10:54:22 PM
 #1

Hi All,

for a while a few years ago when bullion prices had been crushed I was buying silver and gold coins/bars in bulk and then selling in smaller lots on eBay
 (ebay id black-swan-bullion )
http://feedback.ebay.com/ws/eBayISAPI.dll?ViewFeedback2&userid=black-swan-bullion&ftab=AllFeedback&seeallfeedback=See%20All%20Feedback&myworld=true).

I am trying to gauge if there would be any interest in futures contracts that were settled in physical gold or silver bullion traded on GLBSE.  The futures contract would settle in a specific bullion type, ie one 2012 1/10oz Gold American Eagle, and the price would include expedited shipping and insurance costs within the US to the holder of the futures contract on the specified expiration date.

One could hold the futures contract as a way to speculate on the price of gold relative to BTC, selling before expiration if they didn't want to take delivery of the underlying bullion product.  Or by holding until expiration, the owner would take delivery, in effect purchasing bullion with Bitcoins similar to how Coinabul.com sells.  However, looking at Coinabul BTC prices for their products I think that I could beat them by a few percentage points based on the quotes I received from some of the larger bullion dealers I've worked with, in addition to giving people the chance to speculate and actively trade the BTC to gold and BTC to silver rates without having to take delivery of the products if they so chose.

Anyway, I'm interested in hearing opinions.

Thanks!

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RandomQ
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July 13, 2012, 11:46:18 PM
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I would be interested!!!!

I could always use another way to purchase Metals with bitcoins.

The More Stocks,Bonds,ETF,Futures on GLBSE the better.

And No I won't say anything about ETF VS Futures  Roll Eyes


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July 14, 2012, 02:20:16 PM
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+1 here, already playing with the existing silver/gold funds and am interested in new blood.
BitSense Informatics
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July 14, 2012, 06:19:02 PM
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So it looks like I'll be targeting a slightly different market than what's out there right now for the metal ETFs as the futures contract sizes I would be looking at would be a bit larger since I'd like to try to minimize the percentage that the shipping and insurance costs make up for the total value of the contract.  So probably a minimum contract size for silver would be 5 oz, with the possibility of contracts for 10oz and 100oz bars as well.  Then gold is a bit easier to sell in smaller units due to the $1500/oz price, but I'd be interested to see if there would be a market for larger units such as 1oz coins and bars.

I'll probably due a test run with some existing silver rounds I have and see how things go before committing to making any bulk purchases.


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July 15, 2012, 06:00:58 AM
 #5

Sounds very interesting.
Could you also offer the inverse future = shorting Gold and Silver futures?

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July 15, 2012, 06:15:08 AM
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Watching with interest  Smiley

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July 15, 2012, 06:30:39 AM
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Watching
BitSense Informatics
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July 15, 2012, 05:11:07 PM
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The question of shorting is a good one, which I was thinking about as well.  My guess is that GLBSE doesn't offer true futures contracts, where one could be long or short.  Also with true futures, one usually just has to put a margin deposit of only 10% down in order to hold the contract (thereby giving the holder quite a bit of leverage), whereas my guess is that GLBSE will require 100% of the contract value in order to purchase it.

The other wrinkle is that by being short the contract you would be obligated to deliver the underlying asset when the contract expires. 

I'll think about this a little more and see if maybe there's a way to construct the contract so that one could make a bearish bet on the BTC/GLD, BTC/SLV price but have the contract be settled in BTC rather than in the actual underlying asset.


I was running through the math last night on some of the bullion products that I would potentially offer, and I'm confident I could beat coinabul.com's prices by close to 10% for US customers.  I'll need to do some more homework for international customers as the shipping and insurance options are a bit more complicated.



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July 15, 2012, 05:12:48 PM
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The question of shorting is a good one, which I was thinking about as well.  My guess is that GLBSE doesn't offer true futures contracts, where one could be long or short.  Also with true futures, one usually just has to put a margin deposit of only 10% down in order to hold the contract (thereby giving the holder quite a bit of leverage), whereas my guess is that GLBSE will require 100% of the contract value in order to purchase it.

The other wrinkle is that by being short the contract you would be obligated to deliver the underlying asset when the contract expires. 

I'll think about this a little more and see if maybe there's a way to construct the contract so that one could make a bearish bet on the BTC/GLD, BTC/SLV price but have the contract be settled in BTC rather than in the actual underlying asset.


I was running through the math last night on some of the bullion products that I would potentially offer, and I'm confident I could beat coinabul.com's prices by close to 10% for US customers.  I'll need to do some more homework for international customers as the shipping and insurance options are a bit more complicated.




+1. Thanks for working on Gold and Silver shorting options.

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July 16, 2012, 02:00:02 AM
 #10


I was running through the math last night on some of the bullion products that I would potentially offer, and I'm confident I could beat coinabul.com's prices by close to 10% for US customers.  I'll need to do some more homework for international customers as the shipping and insurance options are a bit more complicated.


Roll Eyes


(In all seriousness though, this sounds like an interesting project, not sure about the legality of it all, but good luck!)

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BitSense Informatics
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July 16, 2012, 02:46:53 AM
 #11

Thanks Coinabul,
I'm not going to have nearly the breadth of products that you offer on your site, which may be the reason my costs would be lower. 

I think the legality of GLBSE itself will come into question at some point, but my guess is that its small potatoes to the SEC right now.  (I'm sure this has been discussed ad nauseum in other threads.)


BitSense Informatics
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July 16, 2012, 02:03:51 PM
 #12

Here's what the initial futures contract will likely look like:

Contract Specs

Description: Generic “Buffalo Design” Coins
Grade: .999 Silver
Weight: 1 Troy Ounce each
Quantity: 5
Total Contract Size: 5 Troy Ounces (5 coins)

Contract Expiration: Saturday August 3rd 00:00 UTC

Settlement Type: Physical Delivery to anywhere in the United States.

Settlement Details: 
  • Contract price includes shipping, and insurance charges to anywhere in the United States.  Shipment to international buyers is not available at this time. If you hold this contract at expiration there will be no further charges in order to take delivery of the underlying asset(s).
  • Buyer of the contract will contact me within 3 days of contract expiration to arrange delivery details.
  • Contract cannot be delivered before expiration.




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July 27, 2012, 09:22:26 PM
 #13

To bookend this thread, the issue was offered on GLBSE today.  The terms are a little different those listed in this thread though.   And a follow on offer which has physical delivery option without expiration is coming at a later time, apparently.

 - http://bitcointalk.org/index.php?topic=94381.0

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