Quote from: piramida on April 06, 2013, 05:52:03 PM

Don't know how reliable it is or who the owner is, but I used it yes, to short a little bitcoins from $98 as a hedge for the main position. It worked as expected (i.e, margin call when prices moved above 140

).

Yup, leverage is a bitch. Now if the exchange rate drops back down below $98 you have no hedge left and have direct exposure again.

Quote from: ||bit on April 06, 2013, 07:42:28 AM

Simply sell your BTC, and pretend you're going long the dollar.

If you are going to do that and don't need the cash right now ... there is a high level of contango so that gives a way to sell and lock in a certain exchange rate.

So let's say using the example above BTC/USD was $90 and BUM3 (June 14th 2013 settlement) was $98 as you said. With 1 BTC to short, you could sell 10 BUM3 contracts and essentially have essentially zero exposure to margin call.

So let's say BTC/USD on June 14th is $140. You then have about 0.7 BTC remaining on June 14th but the exchange rate at that time is $140 so you can sell those 0.7 BTC and get $98. But if the exchange rate drops to $70, you then have a little over 1.4 BTC, which at BTC/USD $70 can be sold for ... $98.

So instead of selling today at the spot market you can sell futures contracts and gain a nice little profit from contango.