Hacker News new | ask | show | jobs
by bcoates 4593 days ago
These options are based on the spot price of another exchange, rather than being tied to a futures contract or something you could actually settle by trading USD for BTC or back. You aren't actually buying or selling an option, but gambling on how much you would have made or lost with a given option trading strategy.

This is known as a "Bucket Shop" and is a classic scam.
1 comments
wangchong87 4593 days ago
I can see Binary Options have limited hedging value as compared to Vanilla Options. But it's incorrect to label it as a scam.

Most futures/options on "traditional" markets are settled in cash rather than physical delivery.

link
bcoates 4593 days ago
There's nothing wrong with settling in cash. There is something wrong with failing to maintain the separation between marketplace and counterparty. There's no meaningful settlement at all here; there is literally no way to get USD into or out of this site--you just get BTC back on take-it-or-don't terms.

You're playing craps, only the dealer rolls the dice for you behind a screen and tells you if you won or not.

I wasn't familiar with the specific subspecies of this called "Binary Options" before, but even basic investigation makes it clear that yes, Binary Options are a scam product. There do not appear to be any legitimate binary options marketplace/peddlers.

There's no reason you couldn't structure an exactly equivalent product out of legitimate securities, so there's no reason for this product to exist outside of running cons.

link
Anderkent 4593 days ago
> You're playing craps, only the dealer rolls the dice for you behind a screen and tells you if you won or not.

Huh? If I understand this correctly, you win if the price on mtgox goes above a certain strike range. That's public information, so surely you can check yourself if you won or not?

link
ye 4593 days ago
> You're playing craps, only the dealer rolls the dice for you behind a screen and tells you if you won or not.

Looks like you have no clue what you're talking about.

The outcome depends on a 3rd party system, which is out of Futureblock's control.

The only real problem I see with the whole thing is trust. Do you trust them not to steal your coins?

link