[benreesman]

Anyone can invent quasi-financial terms to make grandiose claims. The beauty of the market is that loudmouths don’t participate in the market for long.

I’ll sell an American-style options contract to someone who thinks BTC is going anywhere near there at Black-Scholes -75. And I’ll have no trouble financing it.

You want the other side?

[px43]

Shh.. you're scaring all the people who think their computer science degree gives them exceptional insight into how money works.

[benreesman]

In fairness, I was one of those people until I landed at a satellite office of my SV company in New York and started hanging out with real finance players.

[mattnewton]

Not the person you are responding to, but is there somewhere reputable offering these kinds of contracts to no-name retail investors like myself? I would absolutely load up on something like 12,000 - 15,000 USD bitcoin puts depending on the time decay people are offering and how certain I could be that they would actually let me exercise them, and not freeze trading or even go belly up during the crash. I am somewhat.. skeptical I will be able to exercise them on an primarily crypto exchange like Binance that has blocked trading during freefalls before that is structurally dependent on the price of crypto to some extent.

[benreesman]

Depends on the size. At retail size counterparty risk of e.g. Binance or FTX is a talking point, not a legitimate concern.

If you want to take a big position, talk to someone like Wintermute who has a big OTC desk, or if you want a better deal, find a friend of a friend. Someone you know knows a whale.

[mattnewton]

I mean, my use of belly up is definitely hyperbole. But, that the position of say, 12,000 usd per coin expiring in December is a huge enough dip from current prices that it is likely to come true only in the event of a large crash, and during the last crash Binance froze withdrawals and there was a large backlog of “stuck” transactions on the blockchain. I don’t know how these options execute but if I have to move bitcoin on the blockchain to unwind the position I would be afraid of being able to actually unwind it at the most favorable price in a time window, making the risk actually higher than typical models. Or maybe I dont know what I am talking about and Binance options wouldn’t need to actually move coins on the chain to close out the position?

[SilasX]

In the US, LedgerX[1] (now owned by FTX) is a reputable, regulated exchange. The longest-dated put I see for $15k is EOY 2022 and is trading at a spread of $2000-8000.

You can buy puts at the $25k strike dated June 2023 for $4300-4800.

[1] https://app.ledgerx.com/btc There was a link that doesn't require login but I forgot it.

[benreesman]

I don’t know if SBF and I would ever get along personally, but you have to agree that the M&A strategy has been superb.

As well as it needs to be when you’re up against Yi He, that chick gives Bill Gates nightmares: she’s a fucking force of nature.

[SilasX]

Did you mean to post that somewhere else? I’m not sure anything there relates to my comment.

[aaaaaaaaata]

> I don’t know if SBF and I would ever get along personally

Are your court shoes laced?

[mattnewton]

Thank you, this could be exactly what I was looking for, I will look into this.

[SilasX]

Glad to help! Late correction, though, I think I was reading the call side by accident, some of the puts are a lot cheaper.

EOY 2022 $15k strike: $1700-2000

EOY 2022 $10k strike: $700-950

June 2023 $25k strike: $7400-7900

[MacsHeadroom]

There are dozens of dApps where anyone with an internet connection and money can buy/sell puts and other options on BTC anonymously.

They have full openly auditable reserves and all their code is open source and visible on their respective smartchains. Wanting an institution to provide a sub-par solution for this is a cop-out. Put up or shut-up.

[mattnewton]

With a centralized service I don’t need a law degree, I can quickly ask an expert what my rights are and understand an option, and there is a (limited and slow, but existant) method to make myself whole in the event of a problem. Each dApp is its own special setup and it can be quite complicated to figure out exactly how it behaves, who to sue if it doesn’t, and who to pay money to find these things out for me. I hope you’ll forgive me for being worried about trusting that with any significant sum of money.

[aaaaaaaaata]

Stop outsourcing protecting yourself.

[mattnewton]

No man is an island. I’d rather pay taxes for police and hire a plumber than live in the woods with a rifle and fetch my own water, given that there are only so many hours in a day to try and be an expert on everything.

[benreesman]

Ah, but the Randian elite is not concerned with such. Obviously the Galts of the world will have services, they’ll pay for them by running monetary policy as well as Greenspan did.

[benreesman]

Also, not to pile on, but GP said 100-1000USD BTC. I’ll sell puts at that until my Saudi buds run out of money to lend me.

You’re talking 12k-15k, which is a much more interesting options chain.

[mattnewton]

Right, I’ve learned the hard way that if my models are that out of line with the market then my models are wrong in ways that will cost me a lot of money. Satoshi himself could reveal to me the future price of bitcoin is intrinsically around $1,000 USD as a little understood fact of how the blockchain works, and I still wouldn’t trade on that today with prices where they are. Even a instantaneous divine revelation from God to all mankind would take a long time to propagate through the markets and you would lose your money in the meantime.

[benreesman]

I don’t know whether or not you’ve studied economics or financial mathematics, but you’ve concisely and concretely identified something called the Weak-Form Efficient Market Hypothesis.

Maybe you already knew that, but if not you’re a natural.

[pcthrowaway]

I'm pretty bullish crypto but I think there's a chance Bitcoin hits $1000 again in the next 10 years or so.. mainly because I think the case for Ethereum is much better.

I don't understand what Black-Scholes means, but if you're willing to take 10 to 1 odds in my favour I'll draw up a smart contract: we both deposit USDC and receive tokens for our position which can be resold if desired; if bitcoin hits $1000 or less according to the Chainlink BTC_USD oracle at any point between now and 10 years from now, I get 10 USDC for every one of mine wagered

[joebob42]

I don't think "is this where the price is going" really has anything to do with what gp was even saying.

[FabHK]

You're selling puts on BTC struck at 1000 at a discount? Yes, I'll take a few.

[benreesman]

I said 75 bps off what Black Scholes kicks out, gets a little weird with the thin market, and the expiration has to make sense, but in general, fuck yes?

You think BTC is going to drop like 20x in a sane options duration?

I think a lot of people would sell you that.