Very good point! I already wonder when is it best to start shorten Bitcoins.CBE and CBOE will be offering Futures contracts on Bitcoin as early as this month. I would respectfully suggest that before anyone shorts the bejaysus out of Bitcoin to remember that markets can stay irrational longer than you can stay solvent.
....remember that markets can stay irrational longer than you can stay solvent.
I was gonna say that you people with allthe clear evidence you have should just short Bitcoin and become rich.
But, seriously, guys do NOT short Bitcoin...
Things are getting ridiculous at this stage
....But, seriously, guys do NOT short Bitcoin...
@Brendan : If you fundamentally believe strongly that BTC is vapourware, futures offer you the perfect opportunity to put your cash on the table and bet against the cryptocurrency.
At a spread betting seminar years ago they advised to only put about 1% of your available trading fund on any trade.
In the case of shorting bitcoin I wouldn't risk any more than 1%.
Fascinating! It is fair enough to chose BTC as the settlement currency, you will get paid at the spot price and can then convert to your chosen fiat currency. Of course if it is truly zero then you will get zero. The way that would work is that the exchange could set whatever price it likes by being the only buyer on the settlement day. Thus it will spend a dollar to buy BTC at a price higher than the strike thus rendering the PUT proceeds as zero. This would be legitimate.Deribit is the only forum I can find where I could do a put option. I have no idea who they are and what the counterparty risk is.
Does anyone understand this:
View attachment 2386
Take the following one:
View attachment 2387
Someone has paid $5,376 to sell one Bitcoin on 30th March 2018 for $20,000.
If Bitcoin rises to $25,000 - the option is worthless.
If Bitcoin is $19,000, then the option becomes worth $1,000 i.e. they lose $4,376
If I understand that correctly, I would buy a put option on Bitcoin.
Update: One must deposit Bitcoin with Deribit to buy an option and if one wins, one gets paid in Bitcoin! So if they fall to zero, it would be pointless.
Brendan
Of more interest is the IV (Implied Volatility). The IV of a March PUT is 144%. Using the standard lognormal model that means that in 1 year's time there is a 25% chance that BTC will fall by 62% or more and a 10% chance it will fall by 84% or more. But of course the model is log symmetric so the chances on the upside are the mirror image of these.
Yes Boss you are probably right. These are small individual transactions and probably driven by more fundamental considerations than an IV play. Thus you might want a stop loss short position and your counterpart might want to make some fees. IV is some weird mathematical property of your transaction that the Exchange has calculated.Hi Duke
This model might well work for shares in IBM or CRH. But does it have any relevance to Bitcoin?
Bitcoin is worth nothing.
The bit we don't know is how long it will take to reach that end result, and what the path there will be.
Brendan