So let me get this straight...
Go long --> crash down due to domino effect of longs closing --> saved by roll back of trades
Go short --> crash down due to domino effect of longs closing --> lose by roll back of trades (not able to close position at a profit)
Go long --> crash up due to domino effect of shorts closing --> lose by roll back of trades? Will you roll back trades in this instance?
Go short --> crash up due to domino effect of shorts closing --> saved by roll back of trades? Will you roll back trades in this instance?
So we are paying you for a service that if I wanted to profit during a crash, would be impossible?
You say you roll back trades due to lenders losing money, but I've asked multiple times how can lenders loose if positions are forced closed before the possibility of lenders loosing, with no answer.
Who cares if the price goes to zero, some people get cheap coins, lenders don't lose a thing, and the next trade after zero can be any number, possibly only a penny less than before the domino effect began.
I lost money last night because ___________?
If you can give me a legit answer to my last question, which defies everything said in this entire post, then I will give up. If not, give me my profit I should have earned. Pretty simple deal if you ask me.
I think the answer is that you will be able to profit from a crash, but not from a flash crash, and you will be able to profit from a bull run, but not an flash short squeeze.
People seem to be making a "lenders versus traders" story out of this, but let's not forget that for every trader that was short or who had really low buy orders, there is another trader who was leveraged long with a liquidation price at $200 or something like that. These longs are screwed too by flashcrashes.
I honestly think that if there were the type of crash in which the lenders would lose like 10% of their capital, bitfinex would uphold this. But last night would have wiped out nearly everybody. I believe almost every liquidity provider remaining (and future ones) would have packed their bags, left, and never return. The End for margin trading.
So really, again, I think we need to come up with a transparent plan on how these types of flash crashes will be handled in the future, because they WILL happen again.
Unfortunately I think it still is a lenders vs traders problem. I hate to sound combative, but BFX halted trades to protect lenders and I understand fully why, but had BFX followed stamp instead of halting any and all trades till recovery I would have made a significant amount from my short position even before you take into consideration the flash crash.
I appreciate BFX's commitment to finding a middle ground but to a trader this is kind of like blasphemy. Speaking as someone who has been trading a few years now you have to understand trading is a game of strategy, moves and counter-moves. A trader may take on a strategy that can incur 10 minor/moderate losses in a row in an expectation that if they stick to the same strategy they will score one big win on the 11th trade. This is kind of a simplified explanation but you have to understand. For many of us the crash down to 530 (following stamp and other exchanges) wasn't a gamble, it was an expectation--part of a longterm strategy. Those who aren't spreadbetting or scalping, which would be a majority b/c btc is a rough environment for short interval strategies, trade in expectation of a major swing. The last two weeks have been full of false signals and sideways markets that most of us have been sucking up losses from and sticking to a swing strategy in expectation we would see a major and profitable swing.
To save the lenders BFX chose to halt trades and wait for a reversal to prices above where the halt began, this utterly crippled a number of traders I'm sure.
It shouldn't be a matter of 'traders vs lenders' but unfortunately in protecting the interests of one group you harmed another. Again I understand why, but this is something worth taking the time to consider when you make these decisions.
EDITTo append my further post in the future BFX as a matter of policy should
always resume trading after a flashcrash below the price at which it was haltedI.E. If you intended to halt trading at 600 trading should be resumed below 600 the inverse is also true for a short squeeze