Post
Topic
Board Economics
Re: being responsible whales
by
Barabbas0
on 01/01/2015, 15:30:38 UTC
Honestly, a decent derivatives exchange would really help. Whales could have sold covered calls to provide liquidity without outright selling.

With Bitcoin's volatility, leveraged derivatives would really not be necessary to make money.

That's if you're using derivatives for leverage. You could just as easily use them to hedge your position without selling. I'm talking about using BTC as a financial tool, which requires stability, not as a trading instrument.

A derivative needs two people to take opposite positions. Usually, you have a speculator on one end. Speculators provide liquidity to derivative markets and play an important role.

Absolutely. Basically what happens is risk gets traded. The speculator offloads risk from the hedger. It's a change in risk:reward balance.