Quote from: smoothie on April 30, 2013, 08:58:47 AM

Quote from: ColdHardMetal on April 30, 2013, 08:25:57 AM

Quote from: smoothie on April 30, 2013, 08:13:28 AM

http://forexmagnates.com/and-the-first-forex-broker-to-offer-bitcoin-trading-is/

What does this imply for the price?

How does an institution offer leveraged Bitcoin trading through another exchange?

I know bitcoinica did this and failed. Hoping someone can explain this.

Thanks

Tongue

They aren't actually interacting with MTGox at all. They are just using the MTGox price as a reference for settlement of CFD (Contract-for-Difference) contracts that they are offering.

So how do they hedge against their users leveraging in the opposite direction that they are on?

If a user shorts bitcoins on their platform are bitcoins actually borrowed or sold? This is what I'm unsure about.

I think with CFD you only allow trades between two users. The house never takes a position. When the contract ends or a margin call occurs the loser's margin is transferred to the winner.