Quote from: disclaimer201 on May 15, 2012, 08:48:19 AM

Quote from: Boussac on May 14, 2012, 09:26:10 PM

Quote from: World on May 14, 2012, 10:43:59 AM

Quote from: Boussac on Today at 09:04:12 AM

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Bitcoin needs to gain broader acceptance by buyers and merchants to become a credible alternative to the incumbent banking system. What bitcoin does NOT need is to develop fancy speculation tools that most people do not care about.

As I said before margin trading increases liquidity at the cost of volatility. Real trade of real goods and services increases liquidity while reducing volatility

Good luck and best wishes zhoutong,your name will stay in bitcoin Metric forever

Do you sincerely believe the relative price stability we are experiencing since mid february (about the same time as the Tradehill shut down) has something to do with bitcoinica margin trading feature ?

If short selling has one major effect it is precisely that of reducing volatilty. Go and learn some basics from Khan Academy: http://www.youtube.com/watch?v=zAkMhEqWFF0

I stopped watching your video after 2 minutes when I heard "borrowing the stock increases the supply of the stock".
This video falls in the same fallacy as so many academic papers sponsored by brokerage firms or investment banks trying to prove against common sense that shorting has no effect on volatility (for the more conservative papers).
Its sheer propaganda. Plus all this is considering stock trading (unknown future supply of stock) while bitcoin is in limited supply.

If bitcoin margin trading reduces instantaneous volatility it's because it's attracting more volume, only of speculative trade: you then get major swings that are referred to as "market crashes" because the real trade is just not there. It's like squeezing a coil.