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Block Ukx
Forge Laboratories
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Posted - 2010.03.18 23:02:00 -
[1]
The main problem is interest. I've been trying to sell mineral futures and forwards for a long time, but the vast majority of people aren't interested on them.
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Block Ukx
Forge Laboratories
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Posted - 2010.03.19 03:23:00 -
[2]
Nocxium Future 83 ISK ea, delivered April 18, 2010. 5% margin deposit.
(Note: Price subject to change)
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Block Ukx
Forge Laboratories
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Posted - 2010.03.19 13:30:00 -
[3]
 Originally by: Machete Visor
Block - on your future, what is the mechanism? Is it just a verbal agreement? If so, how do we ensure you are here on the delivery date or that you will deliver (or cash settle)? Counterparty risk goes both ways. Paying you a 5% margin when you are free and clear to default is a complete.... scam.
A future is a verbal agreement recorded in the Futures exchange where the futures buyer pays a 5% margin. Mineral volatily can easily exceed 20% in a month, so I'm assuming a larger risk than the future buyer. Usually delivery is done via a contract, so no need for me to be present the delivery day.
The Futures buyer has to trust that BSAC will deliver on its promise. We hold a huge Mineral Reserve, so we have the minerals available for the transaction. We have conducted multi-billion trades as a third party for more than two years without a single complaint.
Here is an link to a previous Futures attempt.
BSAC Mineral Market Manipulation (MinMa) Information Desk |
Block Ukx
Forge Laboratories
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Posted - 2010.03.19 15:36:00 -
[4]
Originally by: Machete Visor
Block - the purpose of a contract with standardized terms / conditions is so that I don:t have to take you at your word.
If you want to do the verbal contract thing, how about giving me 5% on any notional you desire?
I assumed you were familiar with our previous Futures work. BSACÆs goal was and still is to act as a clearing house for a Futures market. What you are proposing is just a simple Futures contract that will likely have no use to anyone. You canÆt contract what you donÆt have, you canÆt trade contracts, and is not any good to a manufacturer if their contract fails; they still need the goods. As a clearing house, BSAC will guarantee purchase/delivery even if Futures sellers/buyers default their contracts.
So, yes BSAC is taking a huge risk away from the Futures participants and people will need to trust BSAC on its promise to purchase/deliver the goods. So far we have never defaulted. I have serious doubt that you could possible guarantee any Futures.
The main issue is that there is no significant demand for such system.
BSAC Mineral Market Manipulation (MinMa) Information Desk |
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