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Virtual Shares - How do they work?

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Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.19 18:04:00 - [1] Are wholly virtual shares supported? Actually, how about options attached to securities (i.e. Callable, puttable, or conversion options)?
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.19 18:22:00 - [2] Originally by: Block Ukx Options are Futures are outside of our current scope of development. I was thinking more along the lines of a convertible bond trading along side an equity in the same venture.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.19 19:10:00 - [3] Originally by: Block Ukx Originally by: herot Will there be any options, for a fee, to convert the virtual shares back into normal ingame shares? No, once the share enters the Exchange and becomes virtual, it will remain in the Exchange. Oh that's bad. That means that the virtual price will stray from the hard share price.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.19 23:36:00 - [4] Originally by: Block Ukx Originally by: herot I really hope that that dosn't also apply to the "virtual isk" that i imagine one would have to deposit in order to trade! ISK can be withdraw anytime. The more I think about it, the more I dislike the "roach motel" treatment of hard shares.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.20 00:00:00 - [5] Originally by: Ji Sama Originally by: Kalrand Originally by: Block Ukx Originally by: herot I really hope that that dosn't also apply to the "virtual isk" that i imagine one would have to deposit in order to trade! ISK can be withdraw anytime. The more I think about it, the more I dislike the "roach motel" treatment of hard shares. care to expand mate, im a little slow. Sure: Lets say someone holds shares on block's exchange, and is thinking about selling them. For whatever reason the prices there aren't too hot, so they wait. Then someone comes along and posts in the forum saying "Hey! I'd love to buy some of those widget shares! I'm willing to pay a perfectly reasonable price for them!". Seems great right? But the buyer wants hard shares and/or doesn't trust Block. So no sale, since the "owner" of the virtual shares has no right to reclaim them. To put it differently, physical shares should command a premium to any virtual shares, since by their very nature, if the virtual price is ever higher, people can virtualize their existing shares to meet that demand. But that doesn't work the other way. So by definition physical shares will always be equal to or more valuable than the virtual ones. So why would you virtualize them? Something like this would be idea for bonds and totally virtual offerings. Also, it means that the exchange can never shrink in size. 10,000 whatever shares go in, and they never come out. Make more sense?
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.20 00:06:00 - [6] Originally by: LarcatOfRens Originally by: Kalrand Stuff about stock. Wait. Why isn't there an ingame stock exchange? The excuse that usually banded about is that the whole corporate share mechanism is the old, totally impenetrable code, that CCP doesn't want to touch, since it might just break everything.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.20 01:47:00 - [7] Originally by: Block Ukx Originally by: Kalrand To put it differently, physical shares should command a premium to any virtual shares, since by their very nature, if the virtual price is ever higher, people can virtualize their existing shares to meet that demand. Yes, the premium is because of the very existence of the Exchange, which is exactly my point. Virtual shares will likely increase in price due to increase volume, affordability, and larger market exposure. No. You didn't read my whole post. The price of virtual shares can not be higher than physical ones. I stated the reason in the post you misunderstood.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.20 11:31:00 - [8] Edited by: Kalrand on 20/01/2010 11:31:15 Originally by: Block Ukx Originally by: Kalrand The price of virtual shares can not be higher than physical ones. I disagree - and some virtual shares are allready trading above the physical ones. You are placing value into holding a physical share which could be extremly hard to trade and undervalue the benefits of a real time exchange. Because of stock splits, virtual shares are much easier to trade, much more affordable, and much more desirable to a stock trader. Market exposure is also larger for virtual shares. The Exchange is gear towards people interested in trading shares, not holding shares. You are wrong. If your exchange reaches any level of popularity, then the fact that shares can be allowed in, and not allowed out, causes the prices on the virtual exchange to be equal to, or lower than, the open market. Cases: 1) Price higher on virtual market than the public market Shares are purchased on the public market, moved to your virtual exchange, and then sold at a higher price, causing the price on the public market to rise, and decrease on the virtual market until they are equal 2) Price is lower on the virtual market than the public market No action, since there is no way to take advantage of the price disparity. 3) Prices are equal on both markets No action, since there is no reason to move from one to the other. In one case the price is lower, in two cases the prices are equal. Now, this ignores the equilibrium that would be reached when all shares of a single venture have been virtualized.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.22 21:43:00 - [9] Originally by: Block Ukx Shares bought in the Exchange cannot be removed from the Exchange unless approved by the Board of Directors. NOTE: There is a proposal to allow share withdrawals with a heavy penalty fee. I just realized I never asked the question: Why is it that you don't want to allow, or want to heavily restrict, withdrawal of shares?
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.22 22:19:00 - [10] Originally by: Dzil I'm guessing this creates the most physical work for Block and his employees: forcing them to calculate out and physically transfer the shares. But that wouldn't be any harder than isk payments.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.22 22:54:00 - [11] Originally by: Block Ukx Shares cannot be tracked with the API. You could always manually adjust your ledger (like you have to when shares are deposited) at the same time you manually return the shares (like you have to when isk is withdrawn).
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.22 23:43:00 - [12] Originally by: Block Ukx Actually, transfering shares can be a headache since there is no way to verify it happened. ISK transfers are easily verified with the API. More of a headache than when they are deposited?
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.23 06:24:00 - [13] Originally by: Block Ukx Originally by: Kalrand More of a headache than when they are deposited? Yes. Consider this. If I process a withdrawl request for 22,500,000 ISK, and by mistake sent 22,000,000 ISK, I can always look at the wallet records to reconcile any mistakes. Since shares transaction are not recorded, I have no mechanism to audit or fix mistakes. That is a legitimate concern. One possible solution would be to execute all transfers through a staging character. What I mean by that is to transfer the number of shares to an account that does not hold any, reconfirm the right number was sent, and then send all shares on the staging character to the user. But yea, it's messy.
Kalrand Charles Ponzi School of Business GoonSwarm	Posted - 2010.01.25 20:32:00 - [14] Originally by: Block Ukx Additions: CEO's will be allowed to remove registered shares from the Exchange once a month. A public announcement must be made in the Exchange. Pending: Exchange share withdraw request. If allowed by the CEO, shareholders could request a share withdraw to be processed by the CEO once a month. It would be the CEO's responsibility to deliver shares to the right shareholder. BSAC will not be responsible for shares transfered to the CEO. Comments! I've been thinking about this, and this is a good way to handle it. Two possible additions: 1) The CEO's might want to list how much they charge for this service ahead of time. 2) You might want a provision for how the exchange will handle shares if the CEO goes missing, or later on disclaims involvement with this exchange.
Kalrand Kalrand's POS Removal Corp	Posted - 2010.06.05 23:26:00 - [15] You could always just use forwards. "I promise to pay the difference between the current price and the price at DT on the 31st to Bob in exchange for xyz isk".
Kalrand Kalrand's POS Removal Corp	Posted - 2010.06.06 01:23:00 - [16] Originally by: Vaerah Vahrokha Originally by: Kalrand You could always just use forwards. "I promise to pay the difference between the current price and the price at DT on the 31st to Bob in exchange for xyz isk". Forwards are a no-go in EvE for anything but (way too) small sums. Contrary to other forms of securities, forwards are matched with their current price only at the end, the guy who would lose in the proposition is completely motivated to scam in that case. Blocks exchange seems to have people that have a lot of collateral on it already. I'm not suggesting that we let someone with no money do this.

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