131–140 of 361 posts
Matt Levine has a good write-up on the situation as usual: https://www.bloomberg.com/opinion/articles/2021-07-06/blockc...
Indeed.
Fake seems like a strange choice of words here. These things arent attempting to deceive anyone into believing they are the real thing. They clearly label themselves as derivatives. We don't call corn futures fake corn, we don't call derivatives of other types fake those things and we shouldn't call these fake stocks. I'm really not defending or not defending whatever these platforms are. I wouldn't be surprised if t…
> We don't call corn futures fake corn /ZC is physically settled[0], so that’s not a great example. /ES (S&P 500) or other index futures that are cash-settled is a better analogy. They’re also, yknow, regulated[1]. [0] https://www.cmegroup.com/markets/agriculture/oilseeds/corn.c... [1] https://www.cftc.gov/
I am yet to find a useful derivative that lacks a settling mechanism. How would you even price such a contract that lacks settling? Like why should it be worth anything at all?
Can anyone explain why regulators wouldn't just smack this down if got big? I can't imagine you can create a mirror stock market without going through some regulatory channels.
In case you've not been paying attention - for the most part the regulators are currently sitting scared in the corner, and not even Musk tweeting asinine stuff like "SEC = Suck Elon's Cock" is able to bring them to action. As always, you get serious enforcement actions only on the down leg, when the public opinion is again behind you.
How does this make sense? If they don't hold the underlying security, where does the value come from? This feel like it's another one of those "while money is flowing in it'll work, but if there's a run, it crashes spectacularly". If the liquidity dries up, i end up owning nothing. With a real security at least i end up owning a small part of apple, but here i literally own nothing.
It's a derivative, it also exists in traditional markets and it's size is gigantic compared to normal markets. As far as I understand it, in this case, it's essentially cash settled.
https://www.investopedia.com/ask/answers/052715/how-big-deri...
Now compare to the M2 money supply https://www.investopedia.com/terms/m/m2.asp
Earlier quoted context omitted.
It's a law that requires financial institutions to "Know Their Customer" in order to operate legally. It's a reasonable law. Following existing regulations will be needed for crypto to have a chance at being mainstream
Or arguably, it's burdening 99% of legitimate users to stop the 1% of bad actors.
So yes, I understand where you're coming from, but my libertarian instincts to reflexively think of KYC/AML as excessive and annoying regulation and untrammeled exchange as a good thing, turn out on closer examination to be simply wrong.
Earlier quoted context omitted.
Nobody is claiming to be selling stock in companies. They're claiming to be, and are, selling synthetic assets that track that price movements of stock.
How is that different to a bucket shop? https://en.wikipedia.org/wiki/Bucket_shop_(stock_market)
But they're absolutely not fraud or "fake stocks".
How does this make sense? If they don't hold the underlying security, where does the value come from? This feel like it's another one of those "while money is flowing in it'll work, but if there's a run, it crashes spectacularly". If the liquidity dries up, i end up owning nothing. With a real security at least i end up owning a small part of apple, but here i literally own nothing.
If the hedge funds and prime brokers are allowed to sell the unsuspecting public a bunch of counterfeit shorts, why not let the crypto market do the same? I’m only half joking.
Do you have a reference for something that's had issues being naked shorted, recently? GME was a short squeeze, but that's different.
How does this make sense? If they don't hold the underlying security, where does the value come from? This feel like it's another one of those "while money is flowing in it'll work, but if there's a run, it crashes spectacularly". If the liquidity dries up, i end up owning nothing. With a real security at least i end up owning a small part of apple, but here i literally own nothing.
It's a derivative, it also exists in traditional markets and it's size is gigantic compared to normal markets. As far as I understand it, in this case, it's essentially cash settled.
Earlier quoted context omitted.
Would you have said the same when we moved from measuring stock prices in increments of dubloons to decimals? Where does all this HN hostility come from, I thought this crypto stuff would mesh so well with the Silicon Valley mindset. Trading should be instant, totally free, in any increment you choose, across borders! That’s the kind of mentality we apply to so much else in tech right? Is this really a bunch of hacke…
>measuring stock prices in increments of dubloons to decimals? "dubloons"? Stock prices used to be in binary fractions. Barely over 20 years ago. Obviously moving to decimals is going backwards, how many people program with BCD these days?
Earlier quoted context omitted.
How is that different to a bucket shop? https://en.wikipedia.org/wiki/Bucket_shop_(stock_market)
It's not really. They're transparent, auditable, and typically they're designed to use over-collateralization to prevent liquidity problems, but they're not 100% immune to them and still count as bucket shops IMO. But they're absolutely not fraud or "fake stocks".
So if what this is doing isn't any different than a bucket shop... I think we'll see the same outcome.