I wanted to make a few notes / updates here for people as it's been a bit of an unsettling week.

We filed the exchange's Mt. Gox claim today; we should have no problem getting our account reopened; the password was plenty secure, and the account was used frequently and created after the salted passwords were added.

I would like to make something clear; as of right now, I have enough BTC (stored outside of Mt. Gox) to cover all losses the exchange would incur if Mt. Gox died and delivered 0 to everyone. It would take me pretty close to zero, but I could do it.

It's my hope that I won't have to do that, but I appreciate the trust you all have put in me and the exchange, and I definitely sleep well at night knowing that we can cover our obligations.

Long term, I am considering how to best store the BTC and USD for the exchange. As it is, I had considered it a safer and more secure solution to use Mt. Gox directly than to deal with Dwolla, wallet backups and etc. This might have been a bad decision, or it might be that Gox is still better placed to deal with this right now, while I work on features. I think we'll know more in the next week or so.

As might be expected, trading has slowed on bitoption this week; it's been helpful for me as we were moving at a breakneck pace for a bit there.

Upcoming Changes
I am 90% settled (meaning: advocate hard, now, if you disagree) on the following structural changes to the market:

As of June 30 or so, all new options written will be European style. We will keep the weekly options close dates. European and American style options will coexist in the system out through roughly Dec-30, as some have been written / bought out in that timeframe; you'll just see the 'exercise' link next to the ones you can exercise.

We will halt trading 24 hours before a period close, and allow exercising of options during that 24 hour period UNTIL we implement auto-exercise, at which point we will probably turn off exercising altogether.

We will soon allow a very specific netting: bought and sold contracts of the same type and positive strike delta for the same date. This is easy to implement and low risk to the exchange, plus it will free up some funds for you all.

This netting system means you'll be able to buy and sell contracts along the way, creating the sort of value that most option traders are looking for. It also means you can dig out your Black-Scholes calculators, something I think will be a big help for proper pricing.

It is my goal to also implement a more effective margin system, along the lines Damien and I have been discussing. When it rolls out, we will likely first lock any account that goes 'negative' based on some risk scoring, and it will need to be manually reinstated; this will give us the ability to make sure we're getting things right, something everybody wants, no doubt.

Because of this locking, I will probably make margining 'opt-in' meaning you can trade on hard assets only, and avoid the heuristic locking.

Finally, I built the system to be pretty careful about money (for instance, the first thing I wrote was the exchange's balance sheet functionality), but I am convinced that a full, replayable log is the right thing to have given what happened with Mt. Gox. I'm still getting my head around the right way to do this; suggestions are welcome. My current plan would be to dump out a log of each request to something like a co-located MongoDB box. This of course has its security implications, and I'm happy to have more eyes on this than less.