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Author Topic: Official ShortNXT Thread + FAQ  (Read 10226 times)

bluemeanie1

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Official ShortNXT Thread + FAQ
May 20, 2014, 09:01:06 pm

Hello all,


 Just thought I'd say a few words about ShortNXT.


What is ShortNXT?

 ShortNXT is an asset you can purchase on the NXT asset exchange that allows you to profit from a diminishing NXT exchange rate.  In other words, if NXT gets cheaper, you get richer.


Who is ShortNXT?

 I am in touch with the issuer and he wishes to remain generally anonymous for now.  You can view his twitter here.  I can vouch for this person's credibility and he will follow through with his payment obligations.  If you are interested in how the calculations work, you can post here and he will respond directly.


How do I ShortNXT?

 Just buy some ShortNXT assets.  If the price of NXT goes down, your asset is worth more, and you can sell it directly on the exchange.


Is ShortNXT bad for NXT?

 Not really. If anything it should make people feel more comfortable here.  If you feel NXT might take a hit in price, you can buy some ShortNXT and protect your wealth.  Instruments such as ShortNXT will help to discover and quickly stabilize the price, which makes it easier for people to value and get involved in the NXT project.


ShortNXT, asset ID:  7297711024038530345


 any other questions please just post below.

 thanks,

-bm
« Last Edit: May 20, 2014, 09:15:16 pm by bluemeanie1 »
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bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:08:18 pm

note: I have no commercial interest in ShortNXT and do not profit from the sale of ShortNXT.

-bm
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Nxter

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:13:54 pm

I do not understand what is what makes the asset more valuable if Nxt sinks..

bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:20:22 pm

I do not understand what is what makes the asset more valuable if Nxt sinks..

ok to be completely clear, the issuer is responsible for maintaining the peg via sell orders.  If he fails to do this, he has broken his contract with the public.

for instance I bought ShortNXT at 96 and the issuer posted a buy order at 97(I'm ahead).  In this case we must trust that the issuer will maintain these pegs.  There is proof of such in the block chain, so if he fails to do so we will have evidence.  I can tell you that this issuer is not interested in running a scam, he works in finance and is interested in using NXT to build financial instruments.  This is his first product.

-bm
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jl777

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:28:05 pm

I do not understand what is what makes the asset more valuable if Nxt sinks..

ok to be completely clear, the issuer is responsible for maintaining the peg via sell orders.  If he fails to do this, he has broken his contract with the public.

for instance I bought ShortNXT at 96 and the issuer posted a buy order at 97(I'm ahead).  In this case we must trust that the issuer will maintain these pegs.  There is proof of such in the block chain, so if he fails to do so we will have evidence.  I can tell you that this issuer is not interested in running a scam, he works in finance and is interested in using NXT to build financial instruments.  This is his first product.

-bm
I will give this a try, it would be a nice option to have.
I assume there is no leverage,eg. if NXT changes in value by 5%, shortNXT changes by 5% the opposite way.
This is a daily peg? where can I see the peg price?
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2Kool4Skewl

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:44:02 pm

This sounds like an inverse ETF.  Obviously, he's offering it because he thinks NXT will go up.
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:46:57 pm

Issuer here.  Correct, no leverage.  If NXT goes down 5% one day, ShortNXT target goes up 5%.  Daily reference prices for NXT and ShortNXT are listed at http://twitter.com/shortnxt.  The supporting orders on the Asset Exchange will be updated as frequently as practicable and as volatility dictates, but will be at least once a day upon adjustment of the daily target.
Account ID: NXT-D7WC-SKR6-F2EC-7VUXL

2Kool4Skewl

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:50:03 pm

Issuer here.  Correct, no leverage.  If NXT goes down 5% one day, ShortNXT target goes up 5%.  Daily reference prices for NXT and ShortNXT are listed at http://twitter.com/shortnxt.  The supporting orders on the Asset Exchange will be updated as frequently as practicable and as volatility dictates, but will be at least once a day upon adjustment of the daily target.

I'd be interested if you offered a double or triple long asset.
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An economic system is a manifestation of an ideology.  What was lost, we shall reclaim.
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jl777

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:51:33 pm

Issuer here.  Correct, no leverage.  If NXT goes down 5% one day, ShortNXT target goes up 5%.  Daily reference prices for NXT and ShortNXT are listed at http://twitter.com/shortnxt.  The supporting orders on the Asset Exchange will be updated as frequently as practicable and as volatility dictates, but will be at least once a day upon adjustment of the daily target.
So it is possible it might be updated more frequently than daily?
Will you assure liquidity of the assets sold?
What is your volume limit?
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bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 09:56:17 pm

This sounds like an inverse ETF.  Obviously, he's offering it because he thinks NXT will go up.

that's precisely right.  The issuer is taking a long position here.

-bm
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2Kool4Skewl

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:00:40 pm

This sounds like an inverse ETF.  Obviously, he's offering it because he thinks NXT will go up.

that's precisely right.  The issuer is taking a long position here.

-bm

Smart move

Now, if only, I could short ShortNXT.
« Last Edit: May 20, 2014, 10:03:49 pm by 2Kool4Skewl »
We are the descendants of Bitcoin.  We are the continuation of the cause it started, but that perished with its centralization.
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tersagun

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:08:18 pm

The NXT will only be compared to USD and not BTC, right?
Is this the same as you are fixing the asset's value to 0.035$? All you are going to do is to change the asset value in NXT accordingly.
Is that correct?

ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:09:51 pm

Issuer here.  Correct, no leverage.  If NXT goes down 5% one day, ShortNXT target goes up 5%.  Daily reference prices for NXT and ShortNXT are listed at http://twitter.com/shortnxt.  The supporting orders on the Asset Exchange will be updated as frequently as practicable and as volatility dictates, but will be at least once a day upon adjustment of the daily target.
So it is possible it might be updated more frequently than daily?
Will you assure liquidity of the assets sold?
What is your volume limit?

The "ShortNXT Daily Reference Price" is only updated once per day (at 10 am ET).  That's the daily reference used to calculate the intraday and next day's gain/loss.  But depending on the size of intraday NXT movements, the supporting bids and asks may be adjusted more frequently than once per day (otherwise, the issuer would have a bunch of foolish orders left up on the order book).

As for liquidity, we will buy back as much ShortNXT as any holder wishes to sell.

We haven't set volume or aggregate exposure limits yet, but we expect to offer guidance on this as we collect trading and usage data.  Updates will be posted to the Twitter account.
Account ID: NXT-D7WC-SKR6-F2EC-7VUXL

ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:12:11 pm

The NXT will only be compared to USD and not BTC, right?
Is this the same as you are fixing the asset's value to 0.035$? All you are going to do is to change the asset value in NXT accordingly.
Is that correct?

Close, but it resets daily, like traditional inverse ETFs.
Account ID: NXT-D7WC-SKR6-F2EC-7VUXL

tersagun

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:17:41 pm

The NXT will only be compared to USD and not BTC, right?
Is this the same as you are fixing the asset's value to 0.035$? All you are going to do is to change the asset value in NXT accordingly.
Is that correct?

Close, but it resets daily, like traditional inverse ETFs.

So in case NXT skyrockets, everyone will try to sell the assets to get more NXT, resulting issuers NXT stocks to cease; the late commers will suffer.
In case NXT goes down big time, everyone will try to buy the assets to secure theirselves, resulting issuers asset stocks to cease; the late commers will suffer/won't take advantage.

So if I figure out correctly, ShortNXT will be useful for the very active people but harmful for the average Joe.

Interesting.

bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:19:30 pm

From the technology standpoint, if there is a large enough interest, we can work in technology features with better insurance and usability characteristics.

I can work with said issuer to spec those things out, free time permitting of course. :)

-bm
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2Kool4Skewl

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:27:42 pm

This could go down in NXT asset exchange history as the least sold asset ever.  No offense issuer and op.   :D
We are the descendants of Bitcoin.  We are the continuation of the cause it started, but that perished with its centralization.
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jl777

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:32:53 pm

Issuer here.  Correct, no leverage.  If NXT goes down 5% one day, ShortNXT target goes up 5%.  Daily reference prices for NXT and ShortNXT are listed at http://twitter.com/shortnxt.  The supporting orders on the Asset Exchange will be updated as frequently as practicable and as volatility dictates, but will be at least once a day upon adjustment of the daily target.
So it is possible it might be updated more frequently than daily?
Will you assure liquidity of the assets sold?
What is your volume limit?

The "ShortNXT Daily Reference Price" is only updated once per day (at 10 am ET).  That's the daily reference used to calculate the intraday and next day's gain/loss.  But depending on the size of intraday NXT movements, the supporting bids and asks may be adjusted more frequently than once per day (otherwise, the issuer would have a bunch of foolish orders left up on the order book).

As for liquidity, we will buy back as much ShortNXT as any holder wishes to sell.

We haven't set volume or aggregate exposure limits yet, but we expect to offer guidance on this as we collect trading and usage data.  Updates will be posted to the Twitter account.
Sorry about all the questions
Is the value of shortNXT only dependent on the change from the previous day?
If it is, this is a volatility play more than anything. shortNXT could hover around 101 everyday for many days in a row while NXT drops 10%, but if there is one day it goes down 5%, it would go to 105

I am a bit confused about the timing. I guess as the price changes more than 1% intraday, you would need to update the quotes. With the 2% spread you have, you could wait even longer, but probably 1% change would be the trigger. To sell back the shortNXT it seems I have to pick the times near the lowest price of the day or it will reset back to 100

If I have this right, what prevents someone from buying a bunch and waiting for a big volatile down day?

James
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bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:36:17 pm

The NXT will only be compared to USD and not BTC, right?
Is this the same as you are fixing the asset's value to 0.035$? All you are going to do is to change the asset value in NXT accordingly.
Is that correct?

Close, but it resets daily, like traditional inverse ETFs.

So in case NXT skyrockets, everyone will try to sell the assets to get more NXT, resulting issuers NXT stocks to cease; the late commers will suffer.
In case NXT goes down big time, everyone will try to buy the assets to secure theirselves, resulting issuers asset stocks to cease; the late commers will suffer/won't take advantage.

So if I figure out correctly, ShortNXT will be useful for the very active people but harmful for the average Joe.

Interesting.

if NXT skyrockets, and you are holding ShortNXT then your cash in value will be incredibly low compared to what you bought it for.

regarding long positions the easiest way to do that is to loan out your NXT.  Again, we dont have any credit support in the block chain at this time but it is possible.

-bm
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:38:20 pm

Quote
Sorry about all the questions
Is the value of shortNXT only dependent on the change from the previous day?
If it is, this is a volatility play more than anything. shortNXT could hover around 101 everyday for many days in a row while NXT drops 10%, but if there is one day it goes down 5%, it would go to 105

I am a bit confused about the timing. I guess as the price changes more than 1% intraday, you would need to update the quotes. With the 2% spread you have, you could wait even longer, but probably 1% change would be the trigger. To sell back the shortNXT it seems I have to pick the times near the lowest price of the day or it will reset back to 100

If I have this right, what prevents someone from buying a bunch and waiting for a big volatile down day?

James
ShortNXT doesn't reset to 100 each day. Only the reference price resets each day.  An example is probably useful:

Day 1: Nxt goes up 5%, ShortNXT goes down 5% (from 100 to 95).
Day 2: Nxt goes up 5% again, ShortNXT goes down 5% again (but it only drops 4.75, which is 5% of 95, to 90.25).

That distinction - the drop on Day 2 to 90.25, rather than to 90 - is the effect of the daily reset in the reference price.
Account ID: NXT-D7WC-SKR6-F2EC-7VUXL
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