Stingtalk Butthurt Exchange version 2017 - Week 0

What are you doing with all these fees you're collecting? $500 is gouging.
 
Akinji07 said:
  • 9/5 is September 5 (the day after the last game played for Week 1)
  • Future's price is calculated based on the probabilities converted from Vegas moneylines for Tenn @ Tech and App State @ ugay. We have four scenarios: Tech win uga win, Tech win uga loss, Tech loss uga win, Tech loss uga loss. Those probabilties are multiplied with each other to get a probability for each scenario. Each scenario already has a price calculated from the multipliers (the only thing that will change it slightly is the ratio of butthurt to hype prior to the games which is calculated into spot price on September 5) so then I weigh each outcome based on their probability to come up with a futures price for that commodity.
  • The 5x is basically saying margin requirement for the future is 20%. It means you have to have 20% of the money with the exchange to be able to enter a futures contract. Because the contract itself also has $500 fee you have to pay the exchange, I set the minimum at $47,500 which the 20% of is $9,500. This will be the minimum for all weeks of play but the maximum can be bigger if you got let's say $20,000 in your portfolio.
Click to expand...

OK, so why can you buy a future on margin, but not short a stock on margin?
 
coit said:
OK, so why can you buy a future on margin, but not short a stock on margin?
Click to expand...

You don't know what 9/5 is or why it has to be 5 times more but then you're asking me why you can't sell shorts on margin?
 
Can't we get some puts and calls? I avoid futures.
 
Akinji07 said:
You don't know what 9/5 is or why it has to be 5 times more but then you're asking me why you can't sell shorts on margin?
Click to expand...


I thought 9/5 was some sort of futures lingo. I'm an engineer, not a financial analyst. If you can owe more than you have on futures, why can't you short more than you have?

When you short sell, you are getting a loan of shares from the brokerage or whoever to sell. And you have to buy them back at a later date. So, why should there be a limit?
 
Diseqc said:
What are you doing with all these fees you're collecting? $500 is gouging.
Click to expand...

$500 is pretty hefty but the amount of money you'll make from a correct guess on a future is a lot more than anything else in this game. $500 is nothing compared to your profits.

But it'll make the losses sting even more.
 
coit said:
I thought 9/5 was some sort of futures lingo. I'm an engineer, not a financial analyst. If you can owe more than you have on futures, why can't you short more than you have?

When you short sell, you are getting a loan of shares from the brokerage or whoever to sell. And you have to buy them back at a later date. So, why should there be a limit?
Click to expand...

Because I decided to make futures strictly margin trading to make it high risk high reward. I didn't need to do that with shorts so you can't trade them on the margin. Simple as that.

You can short futures you know. You don't carry the position but on the day of the future it gets settled just like a regular future. Except you're selling rather than buying.
 
Akinji07 said:
Because I decided to make futures strictly margin trading to make it high risk high reward. I didn't need to do that with shorts so you can't trade them on the margin. Simple as that.

You can short futures you know. You don't carry the position but on the day of the future it gets settled just like a regular future. Except you're selling rather than buying.
Click to expand...


OK, got it.

So if the future price is higher, and you believe that it will go higher, you buy futures. If the future price is higher, and you believe that it will go lower, you short sell futures. If the future price is lower, and you believe that it will go lower, you short sell futures. If the future price is lower and you believe that it will go higher, you buy futures?

I'm having trouble getting why the futures price you set is important? Is that the strike price for the futures transaction I guess?
 
coit said:
OK, got it.

So if the future price is higher, and you believe that it will go higher, you buy futures. If the future price is higher, and you believe that it will go lower, you short sell futures. If the future price is lower, and you believe that it will go lower, you short sell futures. If the future price is lower and you believe that it will go higher, you buy futures?

I'm having trouble getting why the futures price you set is important? Is that the strike price for the futures transaction I guess?
Click to expand...


Futures price is there to let you know which direction the market is more likely to go. It's also like the strike price yes. It's not called a strike price because that's an option term where you have the option of buying or selling the underlying commodity. Buying a future just basically means I bet you x amount of dollars that the price will be above this price. If it's above that price then you win the bet, if it's below the price then you lose the bet. Short selling a future means I bet you x amount of dollars that the price will be below this price. If on Sep 5 it's lower than the futures price that I set on August 8 for September 5 then you win the bet.

So if the future price is higher, and you believe that it will go higher, you buy futures. If the future price is higher, and you believe that it will go lower, you short sell futures. If the future price is lower, and you believe that it will go lower, you short sell futures. If the future price is lower and you believe that it will go higher, you buy futures?
Click to expand...

Yes.
 
Akinji07 said:
Futures price is there to let you know which direction the market is more likely to go. It's also like the strike price yes. It's not called a strike price because that's an option term where you have the option of buying or selling the underlying commodity. Buying a future just basically means I bet you x amount of dollars that the price will be above this price. If it's above that price then you win the bet, if it's below the price then you lose the bet. Short selling a future means I bet you x amount of dollars that the price will be below this price. If on Sep 5 it's lower than the futures price that I set on August 8 for September 5 then you win the bet.
Click to expand...

So is there a chance that the price goes up but not as much as your future price? You would lose money in this case right?
 
coit said:
So is there a chance that the price goes up but not as much as your future price? You would lose money in this case right?
Click to expand...

No. The probabilities that I mentioned earlier weighing each scenario ensure the actual price will be higher than the future price if it's gonna go up. If I was to let that happen it would have been a shit show after week 1 prices come out. Just ease your mind and play the game. Worst thing that can happen is you lose all your stingtalk money.
 
You must log in or register to reply here.
Back
Top