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Professor Bunsen
Optech Scientific
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Posted - 2007.09.25 10:24:00 -
[1]
 Background
Optech Scientific was formed on 1st March 2007. The corporation's first public investment was the successful Optech Startup Fund (Eve-O thread here). Building on this initial success was OPTUT (Eve-O thread here) New Edens first public Unit Trust which returned 75% profits over 2 months (results thread).
Following a brief period of intensive psychotherapy to deal with "issues" surrounding capital ship production, I have returned to my quarters onboard my flagship Ibis at Isanamo, re-invigorated by my sabattical.
Eve-Index launching
Over the next few days Optech will be launching Eve-Index, the first traded mineral options market in New Eden. Pilots will be able to trade mineral futures, pitching their wits against the market in an effort to predict and profit from either a rising or falling market. Holders of minerals will be able to "hedge" against market fluctuations to reduce risk in their mineral portfolio.
The Eve-Index market is not on offer here. The market will be conducted with no trading fees and will be open to all who wish to use it, with the only fee being a 1% withdrawal fee to cover the only manual bit of the process.
Eve-Index is not yet open for live trading, but should be so by Thurs 27th Sept.
How will Optech Mineral Trading Fund profit?
The purpose of the IPO is to raise funds to "write" option contracts. For example in a call option the buyer purchases the right to buy (say) trit at 3.3 isk per unit before a certain date in the future. Contracts of course have two parties, and the other side of the coin is that the person creating the call option (the "writer") enters into the obligation to sell trit at that price.
All options on Eve-Index will be 100% "covered", in other words in order to sell the call contract I must actually hold the trit in case the option holder exercises his right to buy the trit off Optech at that price. This means that to offer 1000 trit call options Optech must buy 1000 contracts worth of trit. As each contract is for 1 mil units of mineral thats about 3.2 bil worth of trit.
Similarly to "write" a put option (which gives the buyer the right to sell at a fixed price) Optech will have to deposit the full cost of the contract with Eve-Index. If we write 1000 put options for Trit at 3.3 isk we require 3.3 bil to cover the possibility that those contracts will be "exercised" (cashed in).
Of course if we correctly predict the market movements the money made from selling the option contracts is our profit to keep.
What could go wrong?
I could be a hopeless mineral trader and consistently predict the markets incorrectly. However, I'm investing 5 bil of my own isk in this so I'm betting on Bunsen!
What capital are you looking to raise?
It is a somewhat flexible feast. I'm hoping for somewhere north of 5 bil, but the larger the sum raised from the market the greater the opportunity to put the money to work.
(Continued below.)
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.25 10:24:00 -
[2]
Is there demand for mineral option trading?
Well it's always tough to be the first to market with a new product and truth be told I don't know for sure, but clearly I'm expecting there is. If theres no demand there's no profits and no risk to the capital. My guess is a lot of players may well take a flutter with isk for fun and major manufacturers holding large mineral stockpiles may use the options to insure their positions against falls in the market.
Mineral options trading may be too complex to appeal to Eve players, however I think Eve is somewhat unique in attracting a playerbase which thrives on complexity so whilst I'm not expecting this will be for everone I'm hopeful there's enough potential market gurus out there.
Scamming risk
Yes its there, and is impossible to control with this type of venture. OPTUT had over 10 bil of funds under management when it was wound up so I've had my hands on similar amounts of public money before without scamming, but I may have gone bad since then.
Cautionary note
Clearly the Optech Mineral Ventures (OMV) may make a lot of money or lose a lot. Unlike a lot of Eve investments which are pretty much a one way bet (scamming aside its hard to lose money in Eve trading unless you take big chances) the value of OMTF shares is likely to rock about somewhat. The share value is actually going to increase and decrease on this one (opportunities on the secondary market anyone?) so caveat emptor!
The bottom line
I'm looking to sell shares in Optech Mineral Ventures to add to my own capital of 5 bil and intend to use the isk to speculate on the mineral markets, mostly through Eve-Index as outlined above. Shares are priced at 1 mil per share. I intend to apply for a stock market listing in due course. Isk for share purchases directed to "Professor Bunsen" please.
Bunsen
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.25 18:50:00 -
[3]
 Originally by: Shadarle
Originally by: Ionia
Professor, why are you going with this model of mineral trading rather than buying/selling on the open market?
Ditto.
2 reasons. First is gearing, there's a lot more movement on an option if you make the right predictions than with minerals directly. 10% on a mineral may give 50% on an option. Secondly I like the idea of developing futures market and enjoyed doing the back end programming to create that.
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.25 19:57:00 -
[4]
Whilst I am genuinely delighted at the discussion of the pros and cons of options in general I am going to politely ask that you do that bit here.
I'm trying to keep this thread nice and clean for the IPO proposal itself.
If a passing mod could tidy up for me it would be appreciated.
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.27 07:49:00 -
[5]
I'm sorry if I am not communicating clearly enough. As I said in the first post, the purpose of the IPO is to raise funds to create a war chest to undertake mineral trading, in particular using the Eve-Index options market. I'm putting 5 bil of my own isk into the venture but feel that there are greater profits to be made with more isk to play with.
A little over 2 bil isk received so far and acknowledged by Eve mail.
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.27 13:57:00 -
[6]
Edited by: Professor Bunsen on 27/09/2007 13:57:20
I created the Eve-Index market website so people can buy and sell mineral futures. Any player will be able to trade using it. Now I'm looking for additional funds to add to my own war chest with which I will go out and try to profit in that market.
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.28 07:27:00 -
[7]
Originally by: Sunset Atrea
So basically, you've provided the Futures Market free of charge and are looking to make money off it yourself using the money you raise via this IPO.
Does the Futures Market its self make any money in this (commission, fees etc), or is it just a web site that facilitates the trading of the Futures?
Correct Atrea. The market itself (Eve-Index) is just the tool to facilitate the trading and won't be an earner. Profits will (hopefully) come by correct prediction of mineral price movements.
Fitz VonHeise and Sgt JoNeZ many thanks. I will be out of game until Sunday but will acknowledge those deposits then. That will be about 2.5 public money and 5 bil of mine so far. I'm going to aim for a 10 bil total capitation which leaves 2.4 bil (2400) shares available.
Bunsen
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.29 18:29:00 -
[8]
Yes please La'yla to Bunsen. Shares will be out over the next few days.
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Professor Bunsen
Optech Scientific
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Posted - 2007.09.30 20:52:00 -
[9]
With a one investor yet to transfer funds I am down to the last 50 shares available so this offering is almost fully subscribed, thank you for your backing gentlemen.
I will create OMV tomorrow evening and start the vote to create the 10,000 shares, so should be ready to distribute shares Tuesday evening.
Bunsen
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Professor Bunsen
Optech Mineral Ventures
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Posted - 2007.10.03 16:35:00 -
[10]
Was set to do it last night as advertised and created the vote to create shares, then forgot to vote in it  Shares will be issued tonight before midnight.
Bunsen
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Professor Bunsen
Optech Mineral Ventures
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Posted - 2007.10.03 21:35:00 -
[11]
All shares issued. After a last minute reshuffle (basically one investment was declined, another investor on waiting list took up most of the allocation) I still have 100 shares in the corp wallet (100 mil worth). If someone wants those over the next few days I will issue them, but if they're not picked up I will take them myself to keep the IPO at a nice round 10 bil with all shares issued.
Bunsen
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