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For the BTC naysayers, would you consider BTC options?

I understand the concern that many have about the bottom falling out on bitcoin. It's not an impossibility, just an improbability. There's an element of risk to buying a bitcoin for $800. It could go down in value real fast, right down to $0. However, it is difficult to ignore the over 5000% gain in a single year that has been demonstrated over the last 12-13 months. With that said, I propose an option:

Trading options contracts on Bitcoin.

If you don't understand options, they work like this. You can buy a call option which gives you the option to buy Bitcoin at a specified price. You aren't required to buy it at that price but you have that option. Obviously, if Bitcoins were trading on an exchange for less than the price listed in the option, the contract is worthless. However, if Bitcoins were trading above that option price, you could buy it at that price and sell it on an exchange for the then current price. Contracts expire after a certain time. Each contract has its own price or premium, set by market demand, duration of contract (more time for a profitable condition to exist), price of the underlying asset (Bitcoin).

Here's an example:

You buy a contract to buy a Bitcoin at a price of $1000, expiring within 6 months. The premium to purchase the contract is $100 in this example. Now, with Bitcoin floating around $750, this contract would be worthless. If Bitcoin never went above $1000 in 6 months, the contract would be worthless and you would be out $100. However, if in that 6 months time, the price of Bitcoin went up to $2000, you could sell that contract to someone else for a $1000 premium, maybe even more if there was plenty of time left in that contract before expiration. You make 10x profit without having to own a bitcoin. If you bought the bitcoin instead, you would only make about $1250 instead and been at risk of a greater loss.

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A non-sequitur. 2 + 2 doesn't = 5.

You have made a reasonable and well articulated rebuttal that brings to light other serious issues. It also does not rely on ad-hominem attacks, or claims that the Federal Reserve acts to lower interest rates which is clearly false.

For that you shall be commended.

However, your argument is a non-sequitur and I shall proceed to prove why that is true. This argument doesn't actually defend the Fed's actions, and here is the sole reason for that. Your argument relies on whether the Fed's decision to set variable interest rates, is either innocuous or malicious practice.

I contend that the price fixing is malicious. You see, you and your colleague clearly stated that the other banks are who set the interest rate levels and caps. That is true.

However the interest rate is NOT fixed, it is variable and set by the Federal Reserve which allows the other banks to raise it. This important fact is left out. The commodity markets thus suffer.

And the other banks who are engaged in hiking/fixing the interest rate, happen to be part of the Federal Reserve System. They are NOT independent banks, it seems. Since most of those banks such as Century, or even Zion, Key Bank etc do not receive any benefit. Who receives the flat rates are JP Morgan, Barclays, & co.

"The game is simple – big speculators that we call commercials (and are lead by JPMorgan) trick other speculators (mostly technical funds) into buying or selling futures contracts, by rigging short term prices through the means of computer algorithms (HFT). The commercials rig prices lower to induce the tech funds into selling so that the commercials can then buy and then reverse the process to the upside. That’s it; that’s the price rig.

Proving Comex price rigging is the mechanical process of artificial pricing is easy; all you have to do is look at the government-published trading data in the COT and Bank Participation Reports. On big price declines, the technical funds are always the sellers and the commercials are always the buyers. On price jumps, the technical funds are always the buyers and the commercials are always the sellers. Because the commercials are always buying on sell-offs and selling on rallies, they appear to many to be operating legitimately."
http://www.caseyresearch.com/gsd/edition/state-department-me...

This is what has the effect of hiking the interest rates for the commodities and future traders. And because JP Morgan Chase is part of the Fed, it's a non-sequitur since: qui-bono. No one but JP and the rest of the Fed benefits, the other markets simply allow inflation and hiked rates on everyone.

This fact forces banks to go back to the Federal Reserve, selling off and doling out at a rate that they despise which takes their business. In turn, this being the reality...the Federal Reserve hikes the spread rates so governance has no choice except to borrow even more and that proves malicious intent.

You see, the Federal Reserve is playing in a market that it owns: Qui Bono? Conflict of interest is broadly exposed here. You tell me whether the public shouldn't know this. They have to know.
http://www.stage2omega.com/blog/what-are-bonds

After all, this is only the lifeblood of the whole nation that we're talking about. This is a deathly serious issue, as anyone in the Fed's way is even being killed. You tell me we can't debate this, when US Citizens across the USA are getting shot or worse.

You tell ME, it doesn't matter that JP Morgan rigs the commodity bonds to benefit his same Federal Reserve; selling off mostly identical short stocks to the same banks. You tell ME, that Jamie Dimon isn't a tyrant for doing this. You tell Bush he isn't a tyrant. You tell THEM who pay Homeland Security, who is the tyrant in the tower?!?

If Michael Douglas came out singing "Hallelujah, we have the government of Gods!" and proceeds to sell off all the short stocks in the market...leaving all other traders and the populous at large holding the bag..by betting the same stock in his Federal Reserve to help his checkbook buddies in Washington..only to later collapse and detain Americans without trial.

You tell me why I shouldn't DESPISE Michael Douglas as a tyrant and a traitor, and ask that his banking enterprise be seized? Not only seized but have him tossed in jail! After all he's declaring himself Government dictator. You tell me again, son why I should ever trust this Federal Reserve to balance the price..when the dole keeps leading right over to JP Morgan's throne room.

Once again …..

You have NO understanding.

You don't understand. It all

You don't understand.

It all goes back to the government. It was our elected officials that passed the Federal Reserve Act, not the fed itself. So place blame accordingly.

Your title summed up your solution: abolishment. Only government can exert that type of force. People can boycott a condition they don't approve of, but they can't tell others what to do except for to try and get their government to exert that level of force.

Like I said, I should have disregarded you right away. Anyone who advocates government intervention to fix a problem isn't on the right track. I should know better than to respond to someone who asserts that there ought to be a law.

________________________________________

You have completely distorted history, and fail to understand

http://www.apfn.org/apfn/reserve.htm

Say again now? You must not even be real.

It was just the politicians who passed the Federal Reserve act? Not the bankers who, through direct duplicity also happened to be politicians and political operatives? You are truly amazing.

The Federal Reserve Act was

The Federal Reserve Act was passed by people elected to office. Those people, regardless of their past or then-present dealings, violated their oaths of office and voted control of our money over to a separate entity.

When it comes to elected officials, I don't care what their prior dealings are once they take their oath. Once they are in session, they are elected leaders and are expected to behave as such. That includes conducting official business such as votes according to the set of laws enacted by the Constitution.

We get the government we vote for.

________________________________________

So around 30% of the public was also simply backing bankers

Wow, thanks for bringing another light of contention to the public's awareness!

That is the Federal Reserve did not have that authority to start with, because the Title of Nobility act prohibited it. Honours and Nobility have none among thieves, however.
http://www.constitution.org/usconsti.htm

And somehow 30% of the public was just conveniently backing unelected bankers for no reason at all, other than you think they were fools?!? Or rather may it be simply because, the deck was stacked in the Federal Reserve's favor...and they didn't even know it. IOW, the Fed must go along with the 17th amendment with it.
http://www.constitution.org/usconsti.htm

You are right, by your own admission they shouldn't have been in office. That is why bankers with no scruples, to this very day, shouldn't hold an office in government. You after all, said yourself they were nobility. Your comment goes to the core cause the public must know....Bankers and politics don't mix.

If I don't trust Bitcoin because its imaginary, why would I

trust a DERIVATIVE of it?

Are you serious or is this a very detailed joke?

Bitcoins are NOT imaginary

numbers. They are represented by bit strings which if anything are *natural* numbers. Imaginary numbers are what you get when you multiply a real number by the square root of negative one.

I offer the following factually-accurate slogan to any bitcoin promoters that might want to use it:
Bitcoin ... natural numbers selected by hand-crafted algorithms.

http://en.wikipedia.org/wiki/Natural_number
http://en.wikipedia.org/wiki/Imaginary_numbers

I'm guessing this was tongue in cheek as well.

My label of "imaginary" had nothing to do with the type of number system used, for the record.

Of course

Just kidding around with the mathematical meanings of natural and imaginary numbers.

To answer your question seriously though, I wouldn't say "trust" is the right word. Buying bitcoin directly is placing a bet on the future brand strength of bitcoin in the digital currency market.

Buying a bitcoin option, the way the OP is describing, is placing a bet on the future brand strength of bitcoin but with two key differences: one, the time frame is limited (by the option expiration), and two, the odds change so that the upside and downside are both magnified. There's a greater chance you'll lose the entire bet, but if you're right your winnings might be substantially greater.

If I want to gamble, I'll stick to Black Jack and Roulette.

Otherwise, I'll keep my gold and silver coins, thanks.

To each his own, but BitCoin and whatever derivatives someone may concoct are not for me.

Puts

I would consider buying some puts, if the spread was not too high. But I imagine if options were offered on a big exchange, BTC would drop like a rock before the little guy could get any puts. Right now there is no easy way to bet against BTC. That is very bad for price-discovery.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

An experienced options trader

will trade any option as long as it priced properly because it not about the underlying security it’s about which strategy the trader employs. The option strategy you described is a recipe for losses; it’s a guess….. Experienced options trader’s never guess.

Stated another way...

An experienced business gambler will gamble with the lives of every productive person in the business, regardless of who they are and how necessary they are, if he thinks he can get away with more than he put into the bet.

If we had true capitalism (where EVERY voice had equal say and information supporting it), people would have deemed stock traders and bankers as social deviates late in 1929 and the world would be a different place today.

Bonds aren't real value

Stated another way, Bonds don't hold any actual real value. The assets hold the value which are often tied up in a ponzi scheme.

That doesn't mean Bonds trading is net negative, just that for the most part it adds no value to the system. It can work and sometimes it does, but if you are going against bond traders especially on public television you better understand this.

http://www.stage2omega.com/blog/how-does-a-bond-offer-issue-...

Bonds are just offers for "buying" things, there is not a real physical asset ultimately. The asset comes in later, and the capital losses invoked from bond trades is often a bigger loss than a gain.

Ultimately I agree with you, bonds trading should be outlawed. In the short term it can produce results in the right hands. But overall, looking at how the Federal Reserve price fixes the market, it's all built on a house of sand tied to that revolving door.

Agreed...

Just another way to get rich quick while creating no substantial wealth. End corporate personhood and make all stockholders directly responsible and accountable for the actions of the company.

NOTE: I am not advocating violence in any way. The content of the post is for intellectual, theoretical, and philosophical discussion. FEDS, please don't come to my house.

If it's my money who are you to say what I do with it

Liberty

Wha???

You go right ahead and buy your way to more wealth all you want. Neither I nor anyone else should be allowed to force you to do anything different.

Just don't go around whining when the public wakes up and publicly labels you just as evil as the Bernank. Don't complain when someone calls you out for making a living from not the usury that was outlawed for centuries or the compound interest which is its evil cousin but even more covert theft from thousands of productive businesses. When people realize that perpetual investors are a major parasite that contributes to social downfall, not unlike institutionalized inflation, you may not like the repercussions.

NO FREAKIN' WAY

For me, the whole idea of Bitcoin is to get the [blank] banks and their derivative games out of our lives. I don't want to see another gambling system spring up where those who play the best bluff get more money for doing nothing productive! I want money to remain just money. I earn a living and it holds my place until I decide what to spend it on.

End the broker based stock market. End the derivatives games. End the speculation profit game. End fractional reserve banking. End compound interest livelihoods. End long term stock ownership.

This is just crazy, especially on a libertarian site.

You may not agree with the

You may not agree with the author's thread, but "end long term stock ownership"? What? That's absurd.

Sure, why not? What's its purpose?

Can you tell me what purpose the public traded and bank manipulated stock market serves? There's only one that I can think of and that's to enrich those with more money to burn than the collective of every productive person in a given business. Put another way, those with money can buy their way into perpetual theft of productivity rather than just assisting with a short term loan.

Question: How many perfectly viable companies have gone under because of nothing more than stock market manipulation? Too many, imho.

In the 2010's, we now have more than enough technology and tools at our disposal to foster private investment for limited, short term purposes to fund any need a business has. This could bring back local accountability which could make quite a difference in the whole globalization movement that's been pushing problems on all of us.

You do realize that prior to around 1890 or so (don't quote me), corporations were only created for a short term purpose such as bridges and roads that businesses couldn't do alone. Everything else was a private owned individual or partnership business. That model can easily work much better in 2013 than it did in the 1800's.

Publicly traded stock enables

Publicly traded stock enables companies to allocate capital to R&D, hiring, expansion, gives them more room to make strategic decisions that benefit the company and shareholders and much more.

"Productivity" means more than just showing up for the days work. Stock gives businesses room to move and plan.

No....

Selling shares of stock enables all those things you just listed. Publicly trading them enables them to grow beyond reasonable expectations and accountability. It also allows 'brokers' to hide secret deals from the common share holders and the public. Deals like premium shares, acquisitions, selective board and officer voting and compartmentalization beyond shareholder oversight. That's where the problems come in.

I never said end stock ownership altogether but to run the world on corporations with no moral counter and no intrinsic financial limits is just really messed up. IMHO, it should just be used short term and for start ups and reasonable growth phases - then bought back from profits.

The biggest problem with it, however, is that endless shareholder ownership pulls all the profits from the corporation, leaving those working fools broke and impoverished. Sorry, but bankers, brokers and traders are not productive members of society in any way other than lending during shortfalls. There's just no reason they should be in the loop at every turn.

One only has to look at the current market where all the news of the day is about how successful the Fed is at hiking up the false DOW and S&P. What a complete joke that is!

You're lying about what you

You're lying about what you wrote and you evidently have no business experience.

You wrote: "End the broker based stock market. End the derivatives games. End the speculation profit game. End fractional reserve banking. End compound interest livelihoods. End long term stock ownership."

Your words were very clear.

Slow down. You're scanning, not reading

I absolutely did say all those things but I didn't say to do it via government mandate. The only thing left is a NON-BROKER BASED stock system that's more open and local. This CAN BE DONE via the free market, although it's not likely with today's media coverage of trader and banker apologists.

For more clarity in the interest of eliminating more he-said-she-said, the people COULD stop supporting any entity that advocates or profits mostly from any of those listed activities. In doing so, those entities would go under and that money would then stay local and go to business owners and/or their workers. I'm pretty sure Wall St. would balk at this idea but I also believe that "workers" has the numbers behind them. This is 'the battle' that we'll soon face.

Nor is it likely due to revolving door media complex operations

Reality is, the Fairness doctrine took away independent media thought. If you ask any talking bobble head if there is any way to avoid stock holding or bonds trading, they will quickly shake their head in disgust. That is simply Middle Ages to them.

You are looking at an entire market that has been trained this way. It isn't going to be easy getting rid of these ingrained beliefs. With or without the over-extended Federal Reserve.
http://www.cafr1.com

Yeah I agree …..Let’s just end capitalism!

Another misinformed poster…….nothing more need said!

Could you be more hypocritical?

Calling me misinformed because I have a different view is rather hypocritical.

This has NOTHING to do with ending capitalism. It's actually the epitome of capitalism with everything that's bastardized it removed.

Please tell me how it's inherent to genuine capitalism that we push all businesses to become corporations so they can split moral accountability among the board and various officers and gain tons of short term cash (then cash out and run), while the majority of stocks are then manipulated and owned as 'premium' shares, never reaching the public.

A genuine capitalistic path would be for people to invest in a LOCALLY KNOWN AND TRUSTED PRIVATE business that he has otherwise interest in, for that investment to foster growth and pay out a dividend and then get bought out by the owner. In this way, the community retains accountability of the owner (so less wage raping, resource raping and pollution harm, etc.) while the bankers don't gain control over the entire process by perpetuating the unsustainable infinite growth paradigm.

I understand you are an investor and stock trader. I'm just sorry that you felt you had to earn your living off the prosperity of others. I'm sure that you earn enough money to sleep well at night, but I'm also sure you don't hang around with those who are impoverished by your lifestyle through no fault of their own.

Casting stones

You have no idea who I am or what I have done.

You made an idiotic statement which compelled me to challenge your idiotic statement.

In all your blather you seemed to missed the one thing that causes all the misery and pain you are whining about….government. Get government out of all the businesses you are complaining about and the market will take care of the rest.

I didn't make the idiotic statement, you did.

You said I was a misinformed poster and insinuated that I wanted to end capitalism. That's idiotic and short sighted.

I replied to the OP question as to whether I would support options in the Bitcoin market. My answer was an emphatic no and I gave numerous reasons. YOU assumed that I meant by government decree but you were wrong. I want information to flow freely so that the free market takes these terroristic market manipulations out of play.

You seem to want the government "out of all the businesses" and you think that will solve everything. Got news for you, government is whatever the people want. If 95% of the voting population became focused on the same solutions tomorrow and acted to their fullest extent, that government would change to reflect said solutions within mere months. The people ultimately control government, they just get too much conflicting information to realize it.

The banks, however, have secretly bought off the media, the universities, the lobbyists, the regulators and the elected representatives. They have broken thousands of laws but through financial blackmail, they cannot be prosecuted. They have NSA dirt on key individuals in the judicial chain. They literally own the regulators and the entire executive chain. They have done all this in a massive concerted effort but the individuals subject to this hostage taking have done mere pittances each to allow it.

So, you tell me, who is the party that society should focus their fight on? Is it the blackmailer or the blackmailed? Since it's much easier to crash the monetary system than change 50 million individual laws and regs, I vote to hunt down the banks.