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Author Topic: Selling/Buying bitcoin call/put options.  (Read 6230 times)
chungenhung
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August 11, 2012, 04:10:39 AM
 #1

Selling/Buying bitcoin call/put options.
We know that bitcoin prices are volatile, and some of us want a guarantee that our BTC will be worth a certain amount in the future.
Mtgox last price is 11.50 on 08/10/2012 on 11pm CST.
I would like to buy or sell, either call or put options. One option = 1 coin. I use one so that smaller players can have access to it. In stocks, one option usually means 100 shares.
Instead of having a set expiration date everyweek or month, the expiration date can be ANY date you choose.
On date of expiration, I will take the MtGox "open price" on 00:00 MtGox time.
If the option is in the money, I will send you difference in USD or BTC value, depending on which option you buy.
Of course, if I bought the option from you, and it is in the money, you would need to pay me the difference in USD or BTC.

Example 1:
I sold 100 call options to cover 100BTC, with strike price of $12, on or before 08/11/2012. That means, I will sell you 100BTC for $12 each from now until 08/11/2012 00:00 MtGox time.
If on 08/11/2012, the "Open price" on MtGox is $13, I will be obligated to pay you $100. However, if the option is not in the money, then it will just expire.
Example 2:
I sold 100 put options to cover 100BTC, with strike price of $12, on or before 08/11/2012. That mean, I will buy from you 100BTC for $12 each from now until 08/11/2012 00:00 MtGox time.
If on 08/11/2012, the "Open price" on MtGox is $11, I will be obligated to pay you $100. However, if the option is not in the money, then it will just expire.

If you are interested, please post either sell/buy, expiration date, call/put, strike, the amount of BTC to cover, and how much you are asking or willing to pay for the entire option.
Example:
Sell 08/19/2012 CALL, $13, 150BTC, 5BTC.
Buy 08/22/2012 CALL, $13, 150BTC, 4BTC.

Currently I am looking to:
Sell 08/25/2012 PUT, $11, 200BTC, 10BTC.

Let me know if you guys think of ways to improve the rules.

Trading MtGox USD for Dwolla/ACH deposit/Chase cash deposit
https://bitcointalk.org/index.php?topic=90115.0
Buy/Sell Call/Put Bitcoin options https://bitcointalk.org/index.php?topic=99853.0
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nimda
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August 11, 2012, 04:44:28 AM
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Ooh, very interesting. I might be in need of some options soon.

I recommend asking me for a signature from my GPG key before doing a trade. I will NEVER deny such a request.
PatrickHarnett
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August 11, 2012, 05:08:32 AM
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I was looking at this last week - my local Financial Markets Authority said it would be a regulated futures activity in a foreign currency (Bitcoin) and I would need a license to trade something like this.  Increased my priority for licensing.
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August 11, 2012, 05:22:48 AM
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I was looking at this last week - my local Financial Markets Authority said it would be a regulated futures activity in a foreign currency (Bitcoin) and I would need a license to trade something like this.  Increased my priority for licensing.
Your local Financial Markets Authority regards Bitcoin as a foreign currency? Shocked

In other news, there are rather simple ways to skirt the licensing regulations with almost zero-risk: negotiate the terms using anonymous PGP keys over Tor, and only transact through Bitcoin.

I recommend asking me for a signature from my GPG key before doing a trade. I will NEVER deny such a request.
PatrickHarnett
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August 11, 2012, 05:24:57 AM
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Not officially, but I placed it in the context of some other virtual currencies, and that was not a tested opinion, but it was a response from the FMA senior solicitor. 
Stephen Gornick
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August 11, 2012, 08:35:25 AM
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Let me know if you guys think of ways to improve the rules.

These are European style?

No escrow of the underlying commodity?  Naked options can be brutal.

chungenhung
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August 11, 2012, 05:13:53 PM
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Let me know if you guys think of ways to improve the rules.

These are European style?

No escrow of the underlying commodity?  Naked options can be brutal.
These are Eurp style for now. In order for it to be american style, there must be a system built to auto buy/sell the btc.
I would say 25% escrow of the total BTC, as most of the time BTC won't swing more than 25%.

Trading MtGox USD for Dwolla/ACH deposit/Chase cash deposit
https://bitcointalk.org/index.php?topic=90115.0
Buy/Sell Call/Put Bitcoin options https://bitcointalk.org/index.php?topic=99853.0
danieldaniel
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January 23, 2013, 08:05:39 PM
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Is this still on?

(Sorry to bump an old thread, but the OP seems to still be active)

zero3112
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May 08, 2013, 01:41:46 AM
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Your right I just say the user logged in and online.
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