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Author Topic: Official ShortNXT Thread + FAQ  (Read 14576 times)

ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:45:55 pm

This could go down in NXT asset exchange history as the least sold asset ever.  No offense issuer and op.   :D
What's the current record? We've sold over 100,000 NXT worth in the first few hours.
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jl777

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:49:41 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.
OK good, otherwise you would be guaranteed to lose money from guys like me :)
It sounds like the mathematical properties will be very close to an actual short, too bad this wasnt available a few days ago.

James
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bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 20, 2014, 10:54:34 pm

This could go down in NXT asset exchange history as the least sold asset ever.  No offense issuer and op.   :D
What's the current record? We've sold over 100,000 NXT worth in the first few hours.

GUYS PLEASE LISTEN.

I know the issuer, he is legit and he's not running a scam.

I understand how such an offering might come across to you from a gut emotional perspective, but these sorts of things greatly add to the image of NXT.  It lets people feel more comfortable that their money is safe here, and that's very important.  If youre long on NXT, like the issuer is, then don't buy it.  If you want to take a more aggressive long position, contact the issuer and try to work out an equity/investment deal.

ShortNXT, you're doing fine.

-bm
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bitcoinpaul

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Re: Official ShortNXT Thread + FAQ
May 21, 2014, 06:33:58 am

Now, if only, I could short ShortNXT.

 ;D
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pandaisftw

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Re: Official ShortNXT Thread + FAQ
May 21, 2014, 07:05:50 am

I may be missing something, but isn't this scenario possible?

Everyone predicts a massive drop, so they buy ShortNXT for 100 NXT each. NXT price drops, and now ShortNXT are worth 110 NXT each. Everyone sells their ShortNXT for 110 NXT.

So the issuer becomes bankrupt in this case, unless he transfers funds to ShortNXT from his personal account. Will the issuer do this? If not, then I don't see how the issuer is going "long", he has no risk at all  - in fact, all the risk is placed on asset holders. If he bankrupts his asset account, asset holders will not be able to redeem their assets at the advertised value.

IMO, this is a problem because ShortNXT is not actually "funded" by loaners who take the loss on a price drop. It's funded by the same people going short.

Also, I'm a little confused as to why there is a price ladder if gains/loss are supposed to be based solely on NXT price movement (and not asset supply/demand itself).

Pandaisftw

ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 21, 2014, 09:30:56 am

Pandaisftw
Issuer's net exposure is well-modeled and won't be allowed to exceed what the issuer can absorb. This somewhat constrains how quickly we can scale volume, but also prevents the kind of bankruptcy event you're describing.

The price ladder (bids well below and asks well above the prevailing price) is a matter of speed and convenience.  Having these orders already on the book makes it quicker and easier to adjust the supporting (i.e. best) orders when NXT moves. It also enables us to have more total liquidity up on the order book than we'd currently be able to maintain, were it loaded all in the best orders. But once that best price is taken out by a user, a new order at that same best price (assuming NXT hasn't meaningfully moved) will be replaced by issuer.  So there's actually more liquidity at the "best" order prices than there appears.

This will be streamlined a bit going forward.
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 21, 2014, 07:41:06 pm

Also, any questions folks want to ask off-list, please email shortnxt@gmail.com.
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allwelder

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 10:28:26 am

seems a good idea,but it did not work for me,boz I think Nxt is price up.
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:13:03 pm

FYI, significantly more liquidity added today. 50,000 NXT worth of ShortNXT being maintained at a 1 NXT spread around implied value.
Account ID: NXT-D7WC-SKR6-F2EC-7VUXL

jl777

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:32:01 pm

FYI, significantly more liquidity added today. 50,000 NXT worth of ShortNXT being maintained at a 1 NXT spread around implied value.
I think this is a strong buy signal for NXT :)
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jl777

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:33:28 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?

James
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bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:47:20 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?

James

it's illegal to take a short position in Belgium?  That must instill great calm in the people of Belgium.  Pretty soon NXT is going to be more valuable than Euros.

-bm
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jl777

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:55:41 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?

James

it's illegal to take a short position in Belgium?  That must instill great calm in the people of Belgium.  Pretty soon NXT is going to be more valuable than Euros.

-bm
https://nxtforum.org/nxt-projects/nxt-legal/msg26272/#msg26272
all crypto derivatives!

Isnt Belgium something like half a percent of the world economy?

Maybe I need to make a shortshortNXT asset :)
Or how about a belgian butterfly waffle asset! It will have semi-chaotic ROI profile based on the type of topping that you add to your waffle. puts, calls and chocolate sauce
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:56:11 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?
This is a bummer for the Belgians, though in keeping with the country's increasingly mild appetite for financial innovation generally. If other EU countries were to follow suit, it would be an unfortunate headwind to maturation and wider adoption of cryptocurrencies on the whole.  Belgium, for now, is something of an outlier by my read of the new rules.
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 02:58:47 pm

Quote
Maybe I need to make a shortshortNXT asset :)
We already have shortshortNXT: NXT.  :)
Account ID: NXT-D7WC-SKR6-F2EC-7VUXL

jl777

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 03:00:41 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?
This is a bummer for the Belgians, though in keeping with the country's increasingly mild appetite for financial innovation generally. If other EU countries were to follow suit, it would be an unfortunate headwind to maturation and wider adoption of cryptocurrencies on the whole.  Belgium, for now, is something of an outlier by my read of the new rules.
Its totally unenforceable. How can you even know that a belgian is going to bid for shortNXT? It is not like you have any control over it, you dont know their IP, you are not marketing to belgians (as far as i know), but it is illegal for both buyer and seller if anybody in belgium buys shortNXT!

If this does become widespread, I think you can just say that shortNXT is actually a USD derivative. flip it around. it becomes longUSD

Now beligium and all other countries will have to make pricing things in crypto illegal!

James
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ShortNXT

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 03:02:24 pm

Quote
If this does become widespread, I think you can just say that shortNXT is actually a USD derivative. flip it around. it becomes longUSD

Now beligium and all other countries will have to make pricing things in crypto illegal!

That's clever.
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bizz

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 03:04:24 pm

Disclaimer: before purchasing, check your local laws. End of story.

bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 03:14:21 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?

James

it's illegal to take a short position in Belgium?  That must instill great calm in the people of Belgium.  Pretty soon NXT is going to be more valuable than Euros.

-bm
https://nxtforum.org/nxt-projects/nxt-legal/msg26272/#msg26272
all crypto derivatives!

Isnt Belgium something like half a percent of the world economy?

Maybe I need to make a shortshortNXT asset :)
Or how about a belgian butterfly waffle asset! It will have semi-chaotic ROI profile based on the type of topping that you add to your waffle. puts, calls and chocolate sauce

WaffleCoin?

This law, and the rate at which they responded to this new technology shows you how terrified they are.  They know the Euro is unstable and the more options European citizens have the faster it's going to collapse.  There is absolutely NO WAY they will be able to enforce this.  What about Switzerland?  Actually Switzerland appears to be contemplating support for cryptos in Swiss courts.

-bm
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bluemeanie1

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Re: Official ShortNXT Thread + FAQ
May 22, 2014, 03:27:27 pm

What will you do about the Belgian crisis? shortNXT will become illegal on July 1st for belgian citizens.
Will you be able to survive the fallout from this?
This is a bummer for the Belgians, though in keeping with the country's increasingly mild appetite for financial innovation generally. If other EU countries were to follow suit, it would be an unfortunate headwind to maturation and wider adoption of cryptocurrencies on the whole.  Belgium, for now, is something of an outlier by my read of the new rules.

ShortNXT, have you ever seen the "Eurodollar Museum" in Brussels?  It's absolutely hilarious.

There's a reason why there are so many cathedrals in Belgium...

-bm
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