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Author Topic: Bitoption.org -- ESCROWED LIVE Bitcoin Options Trading  (Read 35025 times)
bitoption
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June 13, 2011, 05:55:52 PM
 #161

OK, so we could just take commission on any offer that picks up other offers. Unfilled offers get no commission. I'll have to see what that would take on the backend. My gut is that it won't be too difficult.

I no longer believe the session bug is fixed.

----** In Beta: The First Bitcoin Options Market ----**

Explanation and discussion: http://forum.bitcoin.org/index.php?topic=9611.0

API Developer Thread:
http://forum.bitcoin.org/index.php?topic=14194.0

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FreeMoney
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June 13, 2011, 06:02:41 PM
 #162

I think you an gain adoption by catering to the newbie (like me). I do not understand options well and the site would have to guide me really well. Maybe make a dedicated page where the user can input date, strike and price of option and a JavaScript chart immediately updates to tell what this means for different price outcomes.

Feature request two: Give me an input table with 3 columns [Date, Min Price, Max Price]. The user can then enter up to 10 different dates and tell what he thinks in which range the price is going to be with 90% certainty. This wizard should generate a bunch of contracts that make the user money if he is right and lose his money if he is wrong.
This input format would remove the need to know anything about options. The user tells his opinion about the market 1, 2, 3, ... month in the future and you figure out all the math.

Feature #3: Allow orders to be cancelled after X hours automatically. That way we can risk leaving it in for 3 hours without looking.



I imagine sites spring up using bitoption to hedge themselves with names like "Bitcoin Guarantee" and "Easy Option" that have very friendly interfaces and a restricted set of options and do good hand holding.

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bitoption
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June 13, 2011, 06:15:25 PM
 #163

That would be fabulous..

----** In Beta: The First Bitcoin Options Market ----**

Explanation and discussion: http://forum.bitcoin.org/index.php?topic=9611.0

API Developer Thread:
http://forum.bitcoin.org/index.php?topic=14194.0

-----------------------------------------------------------
nrd525
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June 13, 2011, 07:17:28 PM
 #164

I'm waiting on my bank transfer (IngDirect) to Dwolla. So far it has been 3 days and they are predicting 5 days.

I'd think IngDirect, an online bank, would be faster...

Steps
1) get dwolla
2) verify bank account for transfers to dwolla (1-2 days)
3) send money to dwolla (3-5 days)
4) get mtgox
5) send money to mtgox (hopefully <1 day)
6) send money from mtgox to bitoptions (hopefully <1 day)

Don't day trade.
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June 13, 2011, 07:25:05 PM
 #165

I'm waiting on my bank transfer (IngDirect) to Dwolla. So far it has been 3 days and they are predicting 5 days.

I'd think IngDirect, an online bank, would be faster...

Steps
1) get dwolla
2) verify bank account for transfers to dwolla (1-2 days)
3) send money to dwolla (3-5 days)
4) get mtgox
5) send money to mtgox (hopefully <1 day)
6) send money from mtgox to bitoptions (hopefully <1 day)

I'm in the same boat. Serves me right for trying to transfer money just before the weekend.

Hey, maybe the market will take a dive again while we wait!

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random_cat
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June 13, 2011, 07:50:06 PM
 #166

Not sure if it is just me or more general, but after I submit an order on the website, the balance "tab" seems to be a noop until I shift away from the page (i.e. select my contracts).

Edit: Unless you rapidly responded and tweaked the code, I'm pretty sure it's just me.
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June 13, 2011, 08:02:19 PM
 #167

That would be fabulous..

Don't rely on it.

I would actually use the exchange to buy some nuclear long options if I had the time to study options and to the calculations.
bitoption
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June 13, 2011, 08:18:09 PM
 #168

Hans, as you say!

However, we'll get there; there will be a tipping point in terms of usefulness, and until then, it will take a little more work to make the money.

Re: Money, yes, if you have no BTC, it takes some time to get some, and then send over. I'm guessing you guys are super-bears, so you only wish to be in BTC for a few moments max.


----** In Beta: The First Bitcoin Options Market ----**

Explanation and discussion: http://forum.bitcoin.org/index.php?topic=9611.0

API Developer Thread:
http://forum.bitcoin.org/index.php?topic=14194.0

-----------------------------------------------------------
NOTAL
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June 13, 2011, 08:45:26 PM
 #169

Thanks for the service bitoption! I'm having fun playing around with a few bitcoins. One question: (This is probably a dumb question, but I'm just learning about options and haven't figured out all the proper terminology.) On the "My Contracts" page what is "Est. Value"? Is that short for "Estimated Value of the Contract"? If so, how is this calculated? Is it based on current BTC/USD rate, or recent prices of similar contracts?

Thanks.
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June 13, 2011, 10:39:47 PM
 #170

Hans, as you say!

However, we'll get there; there will be a tipping point in terms of usefulness, and until then, it will take a little more work to make the money.

Re: Money, yes, if you have no BTC, it takes some time to get some, and then send over. I'm guessing you guys are super-bears, so you only wish to be in BTC for a few moments max.

If you are interested in my use case: I believe btc will gradually rise over the next 5-10 years to 200k$ per btc. I would like to purchase options which will explode like an atomic bomb if my expectations are met - and fizzle in all other cases to 0. Once I figure out how to do that I will purchase. I would also agree to buy a contract for a shorter term but because btc is very volatile this is risky - and it would have to be far better than just buying btc directly.
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June 13, 2011, 10:46:51 PM
 #171

Hans, as you say!

However, we'll get there; there will be a tipping point in terms of usefulness, and until then, it will take a little more work to make the money.

Re: Money, yes, if you have no BTC, it takes some time to get some, and then send over. I'm guessing you guys are super-bears, so you only wish to be in BTC for a few moments max.

If you are interested in my use case: I believe btc will gradually rise over the next 5-10 years to 200k$ per btc. I would like to purchase options which will explode like an atomic bomb if my expectations are met - and fizzle in all other cases to 0. Once I figure out how to do that I will purchase. I would also agree to buy a contract for a shorter term but because btc is very volatile this is risky - and it would have to be far better than just buying btc directly.


This is more or less my situation (but with a different price target). If I saw options to sell bitcoins at $50 to $100 each three years from now, I would be very tempted to put some money down.

I should add that before I would put significant money into a system like this for a significant time, I would want some assurance that the person running it isn't going to just disappear with the bitcoins someday. For instance, posting bond with a trusted forum member would be a good start. I did that for my own little futures experiment (see sig).

To get really big, you are going to have to develop big trust somehow. I have no idea what that would take, but I know you haven't earned it yet.

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June 13, 2011, 11:12:33 PM
 #172

Hans, as you say!

However, we'll get there; there will be a tipping point in terms of usefulness, and until then, it will take a little more work to make the money.

Re: Money, yes, if you have no BTC, it takes some time to get some, and then send over. I'm guessing you guys are super-bears, so you only wish to be in BTC for a few moments max.

If you are interested in my use case: I believe btc will gradually rise over the next 5-10 years to 200k$ per btc. I would like to purchase options which will explode like an atomic bomb if my expectations are met - and fizzle in all other cases to 0. Once I figure out how to do that I will purchase. I would also agree to buy a contract for a shorter term but because btc is very volatile this is risky - and it would have to be far better than just buying btc directly.


This is more or less my situation (but with a different price target). If I saw options to sell bitcoins at $50 to $100 each three years from now, I would be very tempted to put some money down.

I should add that before I would put significant money into a system like this for a significant time, I would want some assurance that the person running it isn't going to just disappear with the bitcoins someday. For instance, posting bond with a trusted forum member would be a good start. I did that for my own little futures experiment (see sig).

To get really big, you are going to have to develop big trust somehow. I have no idea what that would take, but I know you haven't earned it yet.

While I wouldn't trust you [bitoption] with a huge amount yet, you are earning trust with me. I really appreciate all the communication and constant improvements. I can tell you are in it for the long haul.

I want to clarify something about the counterparty risk. We obviously have to trust you, but is MtGox ever holding our bitcoins? Or just our dollars? It isn't that I don't trust them, I just want to know how much I've got with them total.

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June 13, 2011, 11:15:13 PM
 #173

This is more or less my situation (but with a different price target). If I saw options to sell bitcoins at $50 to $100 each three years from now, I would be very tempted to put some money down.

I replied here: http://forum.bitcoin.org/index.php?topic=7985.msg215208#msg215208 What is you price target then? Your calculation suggests that it might be more than mine. Anyways, it is enough.


I should add that before I would put significant money into a system like this for a significant time, I would want some assurance that the person running it isn't going to just disappear with the bitcoins someday. For instance, posting bond with a trusted forum member would be a good start. I did that for my own little futures experiment (see sig).

To get really big, you are going to have to develop big trust somehow. I have no idea what that would take, but I know you haven't earned it yet.

I fully agree. That would actually prevent me from signing a long term contract. Especially if the other guy would have to pay me 10m$ because I am right. He would just not do it.
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June 13, 2011, 11:18:03 PM
 #174

I think I already asked this, sorry if I missed the answer.

Could you easily implement straight BTC/USD trades on site without going through MtGox? You would still use them for moving the USD, but there doesn't seem to be a need for me to always do a market order over there with a fee when another bitoptions customer will probably come along soon wanting the other side.

It would be nice from a convenience angle too. I didn't want to sell when the price was $13 so I had to wait until it was high AND I was available. If I could have just placed an ask at $20 it would have been filled the next time I came to trade.

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June 14, 2011, 06:10:26 AM
 #175

Hey Demonofelru,

You can send us USD through Mt. Gox' send USD, and we will (manually) send you out USD using the Mt. Gox send cash-to-an-email functionality. Just email me at admin@bitoption.com.


Awesome! Thanks for the fast reply, just made your service so much more attractive to me.

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June 14, 2011, 06:12:35 AM
 #176

watching thread.

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June 14, 2011, 09:27:07 AM
 #177

Just put in a few trades. We'll see how this all works out. A couple of things:

First, I think the american options should stay. I know they are hard to manage with the volatility, but otherwise it seems like a crap shoot. I can feel 50% confidant that bitcoins will trade over $30 sometime in the next month, but whether it'll be above $30 in exactly a month seems far too shaky and dependent on rumor and naive speculation.

Second, I would really like to be able to exchange my USD when I don't have enough for a full bitcoin. It seems like often when I'm asking on calls, my math is often based on being able to reinvest the USD I get into bitcoins. If someone buys my $5 call, I want to be able to invest it into .25 bitcoins. This helps me raise the "break even" price, because as bitcoins go up, putting me in a worse position, the .25 bitcoins I purchased are also going up in value. There currently doesn't seem to be the volume to guarantee that I can get enough USD to buy a full bitcoin, so in the meantime, I would like to be able to purchase (and perhaps sell) fractions of a bitcoin. Just like I can at mt gox.

Also if I'm biding on a call, there is often low volume, so I can only get a couple at $2. But in order to have any cash I have to break a full bitcoin. Then I have $15-$20 left over, and it isn't enough to buy a full bitcoin. This makes it so that my hoped for scenario of bitcoins going up may actually cost me compared to leaving the bitcoin because I have some spare USD instead of .8 bitcoins.

I hope that all makes sense, I'm not sure if I'm up on the lingo.


EDIT: I thought of a feature I'd like to request. I'll like to be able to fill of bid or ask in existence by just clicking on it. Right now when you click on a bid or ask you see the amount available and other prices behind them. In this window I'd like to be able to click a "fill" button. This way, if I want to fill the order I don't have to enter all the exact same data into the order field.

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bitoption
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June 14, 2011, 07:25:15 PM
 #178

Things in progress right now:


. "Pick up" a bid/ask directly from the board
. rewrite of the sessions system. booo...
. collecting final comments on simple binary options before launch
. Review with legal counsel next monday to sort domicile issues


Mid-term
Still deciding between bots, buy-to-cover, margin?, stop-loss..

Strike price controls are almost certain to go in place.
It looks like there's demand for weekly options, so I'll probably keep those for now.

Thanks for all your trust, folks!

A quick market review; we're growing in liquidity, slowly; after the initial interest surge, people are waiting to see how the market works, I think. Roughly 2/3 of the money in the market is on the sidelines right now, so there's more liquidity waiting there for the right circumstances.

The vast majority of options (75%) are currently out of the money, which is to say that writers have done better than bidders so far. Overall the bent looks long on the exchange, I think we're still waiting for the shorts to get their USD cycled through Gox and over to us, so we may say some better short offers out there soon.

Good luck all, and happy trading!

----** In Beta: The First Bitcoin Options Market ----**

Explanation and discussion: http://forum.bitcoin.org/index.php?topic=9611.0

API Developer Thread:
http://forum.bitcoin.org/index.php?topic=14194.0

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DamienBlack
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June 15, 2011, 01:50:15 AM
 #179

If I had the option to get some decent leverage, I might consider being a market maker. I could very easily put more competitive prices than are currently up on almost every bid/ask. The problem is that I would have to tie up thousands of bitcoins in funds to do so, and it seems silly since most of them won't even be purchased. At the very least, I'd like to be able to place $1,000 worth of bids even though I only have $100, and if $100 worth gets picked up, my other bids would get removed. Pseudo-leverage. I can't really see any risk in that for you. As long as the system is careful about not over filling me. If everyone had this option, both on the USD side and the BTC side I think we'd see a lot more action happening.

As far as actual leverage, I don't really know how you could manage that. At current liquidity level (and any in the foreseeable future) it seems like you would be taking far too much risk. I can't see how you could force me out of a position if it starts to turn against me without much, much more liquidity.

I think the site would become a lot more popular if people saw bids and asks in a whole lot of different sections, even if the spread was wide and the prices not that great. Right now I can't really get into the position I want to even if I'm willing to pay a good bit above what I think fair.

PS - the numbers on my board are right justified, instead of centered. Makes the board look pretty crappy. I'm using firefox 4, windows 7.

PPS - Thursday at 00:00 is Thursday morning right?

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DamienBlack
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June 15, 2011, 02:44:10 AM
 #180

Woot, I just manage to sell my first option at a higher price than I picked it up for. Liquidity here we come.

By the way, they did not 'cancel out' in my 'active contracts'. This is what I see:

BOUGHT    2011-07-28    call    50.0000    1    -30.7    Exercise
WROTE    2011-06-23    call    28.5000    2    -9.2    
WROTE    2011-07-28    call    50.0000    1    -30.7  

Since the first and third are the same contract, one bought, and one wrote, shouldn't they just go away? Or do american options not work like that since I may choose to exercise it at a different time? I was trying to sell the option I had, not create a new contract, I figured it was the same thing. Now I have an extra bitcoin tied up. Sad What did I do wrong?

Which leads me to another question. Are the options auto-exercised at strike if they are in the money? I guess not... hmmm... It seems like you should really implement liquidating immediately to pay to exercise the position. Then you could auto-exercise contracts in the money for people when they strike. I don't see the risk if you just verify that the mt gox trade went through. Although the user takes risk counting on that possibility if mt gox is down.

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