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It seems conceptually crazy to me to buy a put option in such a system where I would be exposed to USD/BTC as well as having no recourse against an anonymous is
by filearts 13y ago
It seems conceptually crazy to me to buy a put option in such a system where I would be exposed to USD/BTC as well as having no recourse against an anonymous issuer (for 80% of the underlying price).
How do the site's creators think market participants will handle these conditions?
- ciscoriordan 13y agoRight now the market can bake those risks into the option prices. Also, if there is demand for different margin requirements we'll add contracts with those requirements.
- filearts 13y agoIt will be pretty interesting to see what spread emerges between calls and puts in these circumstances. Care to speculate? ;-)
- bayesianhorse 13y agoThat's the problem with learning all about options before actually caring for the reason they exist: risk management. Options can be replicated with a portfolio, which usually requires a certain minimum size. Investors with a lesser budget would then buy the smaller units of "risk management". In a way portfolio management through risk diversification isn't free lunch. For example if an investor has $1000 he can't realize a portfolio weight of 10% in a stock that is worth more than $100 per share.