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Leida FireEye
Iron Eagle Industries
0
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Posted - 2016.08.13 18:38:26 -
[1] - Quote
Anyone interested in buying call option contracts on PLEX?
If you're not familiar with options see this https://en.wikipedia.org/wiki/Call_option to understand why you might want or not want options.
I'm open to negotiation on terms. If you want to keep it simple here some suggested terms based on the current price of 1 PLEX (13-Aug-2016):
Period 2 wk, strike 1.05b, premium 30m Period 2 wk, strike 1b, premium 60m Period 2 wk, strike 950m, premium 100m Is it possible for me to cancel the contracts or just not create them after you send me money? Yep. You're trusting me not to do that. If collateralizing the premium is the only thing stopping you, reply and let me know so I can judge how big the demand for that is and look into if it's a big problem for this business model.
If this goes well I may sell put options in the future, but for now I'm sticking to calls. |
virm pasuul
The Congregation No Handlebars.
394
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Posted - 2016.08.17 11:36:58 -
[2] - Quote
I know nothing about call options.
Is it at all significant that your options don't add up to the same valuation of a PLEX?
Period 2 wk, strike 1.05b, premium 30m cost of plex = 1.08B Period 2 wk, strike 1b, premium 60m cost of plex = 1.06B Period 2 wk, strike 950m, premium 100m cost of plex = 1.05B
Logically if I believe the cost of plex is going to go up I should choose the third option? The only reason I can think of is to encourage the higher premium if this were a scam? Perhaps there is something I'm missing?
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Tipa Riot
Federal Navy Academy Gallente Federation
2760
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Posted - 2016.08.17 12:19:36 -
[3] - Quote
I don't think this works in the EvE economy, as there is no way to go short (as a balance). Beside the fact that there is no trust beyond full collateral.
I'm my own NPC alt.
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Do Little
Virgin Plc Evictus.
331
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Posted - 2016.08.17 15:18:17 -
[4] - Quote
Eve has no mechanism to support an options market (or other securities market).Without that, there can be no price discovery (anyone remember 2008 and CDOs?) Without a market (and puts) you can't use them as hedges or setup common strategies like spreads.
Real option markets work well because they are cheap and liquid - the one proposed is neither, nor is there any guarantee that the call is covered. Personally, I will look for lower risk investments. |
Leida FireEye
Iron Eagle Industries
0
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Posted - 2016.08.17 23:25:22 -
[5] - Quote
virm pasuul wrote:
Is it at all significant that your options don't add up to the same valuation of a PLEX?
I consciously didn't bother with adding them up because I wanted those to serve as starting points for negotiation, not absolute prices. Since this hasn't been tested before (AFAIK) I didn't have a good reference for what fair prices would be. I based my estimates on intrinsic value + recent volatility.
virm pasuul wrote: Logically if I believe the cost of plex is going to go up I should choose the third option?
Depends on how much certainty you have in your PLEX price estimate. If you are completely wrong about where the price will be in 2 weeks your loss is never more than the cost of the option, which is where cheap options can gain traction. This gets backs to the crux of EVE - risk versus reward. Low cost = low risk and low reward.
Tipa Riot wrote: I don't think this works in the EvE economy, as there is no way to go short
I agree that this limits the usefulness of options as oppose to the real market, but I am not convinced it makes them completely unworkable. Options, after all, have value only because they can be exercised, which is possible through the contract system.
Do little wrote: nor is there any guarantee that the call is covered.
I should have been clearer about how I imagine this looks in practice - the PLEX would be part of the contract I create to the buyer of the option. I expect any dishonesty on my part would quickly be reported on this thread. Without a "first buyer" we're still in untested territory and I don't see an easy solution to that. If I were trying to scam I'd pose as a buyer with an alt.
As noted earlier the maximum loss to an option buyer is the cost of the option. |
Careby
284
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Posted - 2016.08.18 10:24:51 -
[6] - Quote
I have always been interested in options and futures trading. And I think they would be great additions to EVE, both for hedging an d investment purposes, as well as for outright gambling, which is a favorite pastime for a lot of players. A year ago I was trying to come up with a workable system for an exchange that would guarantee option contracts and allow anyone to buy or sell options. The stumbling block I could not get past was trust. There was no way I would have the required level of trust to be accepted as the counterparty for the transactions, and there would not be enough profit per transaction to interest a "trusted third party".
For options to work, the risk needs to be reduced to only the price movement of the underlying item. Any perceived risk of non-performance on the part of the buyer or seller needs to be removed from the equation. That's the challenge.
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