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Slavemaster
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Posted - 2010.06.29 13:59:00 -
[1]
In this Thread there is many that wants to and see the possibilities for the use of Derivative, Futures Contracts, Option in EVE as an adition to the regular Bonds. And there are some great ideas how to impliment it
ABC: Derivative,Futures Contracts, Option is not more complicated that the ordinary Bonds here. - I`ll try with an Example.
You want to invest in Trit: The problem is that You only got 10 mil. With this Model you can borrow 100mil with the security in 10 mil
- The Difference is that you dont control the ISK. All the money is at the Broker/Player
So whats the Catch: - Stopp loss: If Trit goes down to the you will lose all you ISK. On the other hand if Trir goes up you will gain more with 100mil, than with 10.
In short: With a Derivative you don't control the money with a (EVE)Bond you do.
But why do it, whats the Point? - You dont have to write a memo of how cool you are, or begg for a an Audit. - For the Investment Bank the money is in a fee and % - If you anyone else wanna invest in your Project, they Know that the Isk is Safe.
NB: But, most important: Derivative, Futures Contracts, Option will reduce the Scams. The only way to get scammed is that the broker/Audit takes your Isk.
Derivative can be used for almost everything in EVE
An other example: I give 10 mil to my broker. He/she will invest in 100 mil worth of trit at 1. If trit goes down to 0.9 you lose your 10mil If trit goes up to 1.10 you wil gain 10 mil.
So whats the Point of this Thread? - First of all, I dont have the repp, or the need to be in Charge of this. My roll in this is a pure Invester - To get this started 300 Bil? <- Open for Discussions - Add some more Possibilities, and Spice to Marked Bord
Q/A This sounds very Complicated, and its very hard to do? - No, it only takes Isk, Brains, and ISK.
This will be an open discussion and if or when we got the Ideas, how do it, who will invest etc then we can get this thing started.
Comments and Inputs from the Other Thread:
Quote: hinch from here it sounds incrediably like an eve based version of a CFD using trit as the wager item instead
tis interesting tbh since i write/supply software specifically for CFD trading houses that do all the calculations behind their trades so i'm now wondering if I could branch out a version of my trade platform to work on trit/other eve assets. (real time market feeds would help massively :) )
--- Quote.Gabriel Virtus from here: There is no difference between a bet and a derivative. The bets, in RL, are used to decrease costs and limit liability by betting that certain things will be a certain way at the end of the derivative. Complicated langauge and payout schemes are generally used to nudge the risk in favor of one party or another, but at the end of the day it is basically a bet.
OP: I am very happy that things like this are coming around in eve. They can limit risks, especially for large scale producers.
Feel free to comment. - And please post here if you are Intersested in beeing part of the: Development team, CEO, Investor.
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Shar Tegral
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Posted - 2010.06.29 14:42:00 -
[2]
Originally by: Slavemaster Feel free to comment. - And please post here if you are Intersested in beeing part of the: Development team, CEO, Investor.
So posts about how this is insecure, not feasible, and pretty much going to end in tears should not be here? Just wanted some clarification on this.
Wealth, howsoever got, in Eve makes Lords of morons and gentlemen of thieves; Aptitude and intellect are needless here; 'Tis impudence and money that grants fame. |
Estel Arador
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Posted - 2010.06.29 14:43:00 -
[3]
Edited by: Estel Arador on 29/06/2010 14:43:50 For historical reasons, you really should consider using some name other than "EVE Investment Bank".
Free jumpclone service|1092 stations! |
Slavemaster
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Posted - 2010.06.29 14:46:00 -
[4]
Originally by: Estel Arador Edited by: Estel Arador on 29/06/2010 14:43:50 For historical reasons, you really should consider using some name other than "EVE Investment Bank".
K ^^
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hinch
Gallente Legio Victor Requiem-Aeternam
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Posted - 2010.06.29 15:13:00 -
[5]
Edited by: hinch on 29/06/2010 15:13:17 with the exception of the occasional crossed ideologies this is basically just a CFD bet.
basic principals you bet on the increase (or decrease) of a stock where the stoploss is there to mitigate your bet failing so if you set stop loss at 2.5% for example then if the stop drops below 2.5% of your initial investment you pull out and make an overall loss but stops entirely wiping out.
The downside to a CFD is you have to guarantee (in the real world) that you can afford to cover an additional 10x of initial input as you work on a 10% captial fund.
So if you invest 10k the brokerage house plays with 100k on your behalf if however it all crashes and you either didn't take stoplosses or you set your margin too low you have the potential to loose all 100k for which you are responsible for then supplying the difference 90k back to the broker ie: you're in negative equity.
the brokerage house makes its money usually on a 5 basis points commission fee on the trade. so if you do a 10k trade you also at the same time owe the brokerage house 0.005% of your 10k as your fee
i suggest reading yup this page http://www.independentinvestor.co.uk/cfd/ it covers the basics of a cfd.
while this could be implemented in eve it would require a few things the "broker" would need several billion of start up capital and you would have to have some form of guarantee from investors that for their 10% they can afford to make up the remainder should they loose. there's several ways of doing this spring to mind but none that are realistically manageable. your other option would be to remove the 10% capital and require 100% investment however this increases risk. Anyway I've explained it really badly perhaps a couple of screenshots may help (though perhaps not knowing me)
http://www.furious-angels.com/eve/cfd1.jpg http://www.furious-angels.com/eve/cfd2.jpg
anyway long and short its certainly an interesting proposition though lots of hurdles to overcome. Furious Angels Research and Development. Fully researched BPO's, BPC's and T2 invented BPC's to order. FA BPO and BPC Shop |
Shar Tegral
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Posted - 2010.06.29 15:39:00 -
[6]
Originally by: hinch anyway long and short its certainly an interesting proposition though lots of hurdles to overcome.
It is only interesting to the practitioners, not to the public.
Wealth, howsoever got, in Eve makes Lords of morons and gentlemen of thieves; Aptitude and intellect are needless here; 'Tis impudence and money that grants fame. |
hinch
Gallente Legio Victor Requiem-Aeternam
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Posted - 2010.06.29 15:47:00 -
[7]
Originally by: Shar Tegral
Originally by: hinch anyway long and short its certainly an interesting proposition though lots of hurdles to overcome.
It is only interesting to the practitioners, not to the public.
not really if ran right it has the potential for generating large profits for both large investors and low investors and the central fund pool would provide enough isk to operate on large scale market manips which you can't do in the real world but in this case could be used to almost guarantee a profit and never a loss.
that said though its gonna be damn hard to setup Furious Angels Research and Development. Fully researched BPO's, BPC's and T2 invented BPC's to order. FA BPO and BPC Shop |
Shar Tegral
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Posted - 2010.06.29 15:56:00 -
[8]
Originally by: hinch in this case could be used to almost guarantee a profit and never a loss.
Yes... key words. Safe, secure, guaranteed. The mark of shilldom or idiocy.
Wealth, howsoever got, in Eve makes Lords of morons and gentlemen of thieves; Aptitude and intellect are needless here; 'Tis impudence and money that grants fame. |
Mme Pinkerton
United Engineering Services
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Posted - 2010.06.29 15:57:00 -
[9]
Originally by: Slavemaster - To get this started 300 Bil? <- Open for Discussions
maybe you should talk Ji Sama^^
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Vaerah Vahrokha
Minmatar Vahrokh Consulting
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Posted - 2010.06.29 16:16:00 -
[10]
I suggest the OP to do the following:
1) Google for FXPro / Ninjatrader / FXGame / Genesis
2) Install. It's free stuff as long as you stay in demo mode. Try Forex and Futures, the latter is somewhat easier, start with mini S&P.
2.5) < Brick >
3) Be consistently profitable for 1 month.
Once you find out < Brick > to go from 2 to 3, you should:
a) Try switching to the real thing, maybe you are cut for it and will become decently rich.
b) If you still care to apply it in EvE, you will REALLY know how to do it and you'll see why I wrote this post.
- Auditing & consulting
When looking for investors, please read http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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hinch
Gallente Legio Victor Requiem-Aeternam
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Posted - 2010.06.29 16:25:00 -
[11]
Originally by: Shar Tegral
Yes... key words. Safe, secure, guaranteed. The mark of shilldom or idiocy.
i did say almost not definately :) Furious Angels Research and Development. Fully researched BPO's, BPC's and T2 invented BPC's to order. FA BPO and BPC Shop |
hinch
Gallente Legio Victor Requiem-Aeternam
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Posted - 2010.06.29 16:31:00 -
[12]
Originally by: Vaerah Vahrokha I suggest the OP to do the following: 1) Google for FXPro / Ninjatrader / FXGame / Genesis
why would he do fx/forex stuff thats foreign exchange markets he's on about difference betting completely different things :) Furious Angels Research and Development. Fully researched BPO's, BPC's and T2 invented BPC's to order. FA BPO and BPC Shop |
cosmoray
Bella Vista Holdings Corp
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Posted - 2010.06.29 16:40:00 -
[13]
Won't work. I do have experience with this type of trading.
Lets say I make a "bet" that Trit (which is theoretically valued at 10 ISK) will go down. I can bet a stake per unit on Trit dropping, lets say 1M ISK and I bet 100 units. Total is 100M staked.
For every 0.01 ISK Trit drops I make 100M. For every 0.01 ISK Trit rises I lose 100M.
Being profitable is fine, but how will you make people pay if they lose a huge amount? In RL banks will make a margin call and require more collateral/cash to cover their position. How can you force this?
Second minor point but creating an exchange mean you will have to be trusted with B's of ISK, have you earnt it?
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Mme Pinkerton
United Engineering Services
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Posted - 2010.06.29 16:53:00 -
[14]
Edited by: Mme Pinkerton on 29/06/2010 16:53:47
Originally by: cosmoray Second minor point but creating an exchange mean you will have to be trusted with B's of ISK, have you earnt it?
Originally by: Slavemaster - First of all, I dont have the repp, or the need to be in Charge of this. My roll in this is a pure Invester
But all questions of thrustworthiness aside - if you don't create this kind of structure yourself, nobody else in MD will do it.
I think we have a "derivatives in EVE would be sort of cool" thread about once every 2 months - usually these threads die after a few days and nothing happens.
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Vaerah Vahrokha
Minmatar Vahrokh Consulting
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Posted - 2010.06.29 17:00:00 -
[15]
Quote:
why would he do fx/forex stuff thats foreign exchange markets he's on about difference betting completely different things :)
Because the hard part is not in understanding forex / futures (they act as painless placeholder) but the contour of things that transform a "bet" like this into something people can meter and trust and see done the proper way. - Auditing & consulting
When looking for investors, please read http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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Hexxx
Minmatar
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Posted - 2010.06.29 17:31:00 -
[16]
Nothing would make me happier than to see this done and have it succeed.
As to it's chances of success...I'm not optimistic, but I'll encourage you just the same to give it a shot. Projects Blog |
Vaerah Vahrokha
Minmatar Vahrokh Consulting
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Posted - 2010.06.29 23:55:00 -
[17]
Originally by: Hexxx Nothing would make me happier than to see this done and have it succeed.
As to it's chances of success...I'm not optimistic, but I'll encourage you just the same to give it a shot.
I too would be happy to evolve EvE's trading to its logical next step. Though I'd be only interested in the underlying technicalities, so someone else with the money (which is not my objective in any game) would have to deal with the large sums. - Auditing & consulting
When looking for investors, please read http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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Slavemaster
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Posted - 2010.06.30 11:17:00 -
[18]
Originally by: hinch Edited by: hinch on 29/06/2010 15:13:17 with the exception of the occasional crossed ideologies this is basically just a CFD bet.
basic principals you bet on the increase (or decrease) of a stock where the stoploss is there to mitigate your bet failing so if you set stop loss at 2.5% for example then if the stop drops below 2.5% of your initial investment you pull out and make an overall loss but stops entirely wiping out.
The downside to a CFD is you have to guarantee (in the real world) that you can afford to cover an additional 10x of initial input as you work on a 10% captial fund.
So if you invest 10k the brokerage house plays with 100k on your behalf if however it all crashes and you either didn't take stoplosses or you set your margin too low you have the potential to loose all 100k for which you are responsible for then supplying the difference 90k back to the broker ie: you're in negative equity.
the brokerage house makes its money usually on a 5 basis points commission fee on the trade. so if you do a 10k trade you also at the same time owe the brokerage house 0.005% of your 10k as your fee
i suggest reading yup this page http://www.independentinvestor.co.uk/cfd/ it covers the basics of a cfd.
while this could be implemented in eve it would require a few things the "broker" would need several billion of start up capital and you would have to have some form of guarantee from investors that for their 10% they can afford to make up the remainder should they loose. there's several ways of doing this spring to mind but none that are realistically manageable. your other option would be to remove the 10% capital and require 100% investment however this increases risk. Anyway I've explained it really badly perhaps a couple of screenshots may help (though perhaps not knowing me)
http://www.furious-angels.com/eve/cfd1.jpg http://www.furious-angels.com/eve/cfd2.jpg
anyway long and short its certainly an interesting proposition though lots of hurdles to overcome.
Thank you for you input and yes lots of hurdles to overcome.
- But one thing in that EVE that Derivatives more easy, and less risky is that the marked moves very, very slow. Just spend a day at Jita, or talk to the Day traders there. Generally speaking there have never been a Black Tuesday in EVE,
- The "Marked crash" in EVE has to do with patch notes, test server stuff, and Rumours. -> NB: If Anyone wanna comment on this, do it if you have Experience in day trading, stations trading at Jita 4-4, if not stuff it ^^
- The Marked spikes er generally always upwards: Ex down 0.1 isk, then 0.2 isk. And then a huge buy to get it higher then slowly down.
In short: The marked moves very, very slow and can be easily controlled by the broker, - Yes, There are ways to Warn the Investor that the Stop loss is close. just start a convo ingame, and Transfer isk Even more easy than in Rlf
I am sure there is model that can be transferred to EVE, its just a question of figure out what model to use. - If you have a suggestion for model shoot, and anyone else ofc
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Slavemaster
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Posted - 2010.06.30 11:22:00 -
[19]
Edited by: Slavemaster on 30/06/2010 11:25:42
Originally by: cosmoray Won't work. I do have experience with this type of trading.
Lets say I make a "bet" that Trit (which is theoretically valued at 10 ISK) will go down. I can bet a stake per unit on Trit dropping, lets say 1M ISK and I bet 100 units. Total is 100M staked.
For every 0.01 ISK Trit drops I make 100M. For every 0.01 ISK Trit rises I lose 100M.
Being profitable is fine, but how will you make people pay if they lose a huge amount? In RL banks will make a margin call and require more collateral/cash to cover their position. How can you force this?
Second minor point but creating an exchange mean you will have to be trusted with B's of ISK, have you earnt it?
Hmm, I am not sure you understand the concept, and your Example is not Valid.
- You are betting against the Marked, even thou its possible to implement this at a later stage, it will not be the first priority.
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McPod
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Posted - 2010.06.30 11:55:00 -
[20]
You want to invest in Trit: The problem is that You only got 10mil. With this Model you can borrow 100mil with the security in 10mil
or 300mil wall street style.
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Slavemaster
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Posted - 2010.06.30 11:58:00 -
[21]
Edited by: Slavemaster on 30/06/2010 11:58:42 mm
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