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Should CCP create a framework for options trading?
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Bossman MacDonald
Viziam
Amarr Empire
#1 - 2013-04-05 14:55:28 UTC
I think being able to create and trade simple call and put options contracts would make an entertaining addition to the market game. Does anyone else agree? Is this something that would be difficult for CCP to implement?
OllieNorth
Recidivists Incorporated
#2 - 2013-04-05 14:59:38 UTC
Are we talking option trading on items? Or what? This would work much better if we had a real stock market I think.
Bossman MacDonald
Viziam
Amarr Empire
#3 - 2013-04-05 15:01:58 UTC
Items. Options work just as well with commodity trading as they do with stocks in the real world.

Creating a stock market is a whole different matter.
Alex Grison
Grison Universal
#4 - 2013-04-05 16:09:00 UTC
Yes, this would be difficult to impliment.

Few people would care about it

Fewer people would understand how it works.

and a million-and-one people would get scammed with it.

yes
Tul Breetai
Impromptu Asset Requisition
#5 - 2013-04-05 16:28:27 UTC
Alex Grison wrote:
Yes, this would be difficult to impliment.

Few people would care about it

Fewer people would understand how it works.

and a million-and-one people would get scammed with it.



As long as I can make money on it, what the hell./

There's nothing worse than an EVE player, generally considered to be top of the food chain in the MMO world, that cannot smacktalk with wit and coherency.
OllieNorth
Recidivists Incorporated
#6 - 2013-04-05 16:46:45 UTC
Not to mention you are effectively talking about thousands of separate options markets. You could quite well end up dealing with issues of volume. Would you have the option to trade bundled options of multiple items?

It would either be too simple to be useful or FAR too complex.
Daniel Plain
Doomheim
#7 - 2013-04-05 17:11:50 UTC
i cannot see how this can be done without being heavily exploitable and thus useless.

I should buy an Ishtar.
kla samon
Center for Advanced Studies
Gallente Federation
#8 - 2013-04-06 16:25:07 UTC  |  Edited by: kla samon
If you limit it to minerals and similar commodities it would be pretty simple. Just escrow the commodities being optioned and create 'exchanges' at each of the major hubs so that the trades must take place there.

As long as there is no naked option writing I don't see how it would be all that tough or exploitable.

Write an option to sell 1,000,000 units of trit at x amount of isk = the trit is taken from your hangar and put into escrow. If the option is exercised then the trit gets put into the option holder's hangar.

Write an option to buy 1,000,000 units of trit at x amount of isk = isk is put into escrow etc.

If someone buys the put or call you get the isk and if the option isn't exercised you get your commodity or isk back at the expiration date.

This would actually be pretty awesome, I could make some isk off the piles of minerals currently occupying my hangar.
Lady Zarrina
New Eden Browncoats
#9 - 2013-04-06 17:36:58 UTC
yeah the covered calls and puts with 100% escrow would definately help make it more scam proof.

But anything with margins and no penalties would just be open to scamming.

EVE: All about Flying Frisky and Making Iskie
Felicity Love
Doomheim
#10 - 2013-04-06 23:51:36 UTC
No.

CCP has enough on it's plate without creating something 99.999 % of the pilot community will never use.

True story.

"EVE is dying." -- The Four Forum Trolls of the Apocalypse.   ( Pick four, any four. They all smell.  )
0Lona 0ltor
Adeptio Gloriae
#11 - 2013-04-07 20:13:56 UTC
Felicity Love wrote:
No.

CCP has enough on it's plate without creating something 99.999 % of the pilot community will never use.

True story.



Oh you mean like customizable clothing or an FPS on a dead console? CCP has plenty time for things 99.9% of it's customers don't want or will ever use.
Tom Hagen
Twilight Empire
#12 - 2013-04-08 15:32:00 UTC
kla samon wrote:
If you limit it to minerals and similar commodities it would be pretty simple. Just escrow the commodities being optioned and create 'exchanges' at each of the major hubs so that the trades must take place there.

As long as there is no naked option writing I don't see how it would be all that tough or exploitable.

Write an option to sell 1,000,000 units of trit at x amount of isk = the trit is taken from your hangar and put into escrow. If the option is exercised then the trit gets put into the option holder's hangar.

Write an option to buy 1,000,000 units of trit at x amount of isk = isk is put into escrow etc.

If someone buys the put or call you get the isk and if the option isn't exercised you get your commodity or isk back at the expiration date.

This would actually be pretty awesome, I could make some isk off the piles of minerals currently occupying my hangar.



How? This seems rather useless..
Isn't one of the main point with option trading that you can buy and sell goods for money you don't have today or goods you don't have?
I mean if I could sell my Trit today for a certain price or I could set up an sell option on it to sell it for a higher amount at a later date, sure I would set up the option.
But if I was on the other end. Why would I buy overpriced goods for ISK I have on hand today but I don't get the item until a later date? I would rather buy the cheap Trit today..
Maybe I am stupid, but I wouldn't either put up a sell order for Trit I have in my hangar for a lower price then I can sell at a higher price today. I would rather sell the Trit at a higher price today..

Well, I am not a broker and perhaps my imagination is lacking. But I can't see why they should divert resources for it.
Vinzent Zeppelin
Helsing Securities
#13 - 2013-04-09 19:26:34 UTC  |  Edited by: Vinzent Zeppelin
Tom Hagen wrote:
kla samon wrote:
If you limit it to minerals and similar commodities it would be pretty simple. Just escrow the commodities being optioned and create 'exchanges' at each of the major hubs so that the trades must take place there.

As long as there is no naked option writing I don't see how it would be all that tough or exploitable.

Write an option to sell 1,000,000 units of trit at x amount of isk = the trit is taken from your hangar and put into escrow. If the option is exercised then the trit gets put into the option holder's hangar.

Write an option to buy 1,000,000 units of trit at x amount of isk = isk is put into escrow etc.

If someone buys the put or call you get the isk and if the option isn't exercised you get your commodity or isk back at the expiration date.

This would actually be pretty awesome, I could make some isk off the piles of minerals currently occupying my hangar.



How? This seems rather useless..
Isn't one of the main point with option trading that you can buy and sell goods for money you don't have today or goods you don't have?
I mean if I could sell my Trit today for a certain price or I could set up an sell option on it to sell it for a higher amount at a later date, sure I would set up the option.
But if I was on the other end. Why would I buy overpriced goods for ISK I have on hand today but I don't get the item until a later date? I would rather buy the cheap Trit today..
Maybe I am stupid, but I wouldn't either put up a sell order for Trit I have in my hangar for a lower price then I can sell at a higher price today. I would rather sell the Trit at a higher price today..

Well, I am not a broker and perhaps my imagination is lacking. But I can't see why they should divert resources for it.


Options contracts basically represent the right to buy or sell some asset within a certain amount of time, and someone taking an option (the holder) pays a premium for it. A trade on the underlying asset doesn't actually occur until/unless the contract holder exercises it, although the contract issuer's assets would probably have to be put in escrow.

In the example you mentioned, you would write a put (buy) option if you expected the price of the underlying asset to rise. Say you offer an option to buy 10 million units of tritanium at 5.75 each, with a 3 million isk premium and a term of 3 months. The contract holder pays you 3 million isk up front and your 57.5 million is put into escrow. If the market price for tritanium falls below 5.45 per unit within 3 months, the holder can exercise the option and sell to you at profit. If the price remains steady or increases, the holder lets the option expire, the escrow on your money is released, and you make a profit of 3 million (the premium).
Vaerah Vahrokha
Vahrokh Consulting
#14 - 2013-04-09 21:12:50 UTC
I and Block Ukx and others have tried implementing far more accessible secondary markets throughout the years and never managed to get enough interest off MD, much less from outsiders.

Options are such a niche that even in RL they are traded by a minority, they are conceptually more complicated than "regular" trading.

Leave options be, first let's get a real exchange or futures or something simple (hint: we won't), then we may worry about options.

EvE Online portal | EvE markets tutorials
Adoris Nolen
Sama Guild
#15 - 2013-04-10 03:54:33 UTC
I could see this working for plex. Strike dates would have to be at 4 months, 6months, 9 months and 12m out.
kla samon
Center for Advanced Studies
Gallente Federation
#16 - 2013-04-10 07:14:03 UTC
Vaerah Vahrokha wrote:
I and Block Ukx and others have tried implementing far more accessible secondary markets throughout the years and never managed to get enough interest off MD, much less from outsiders.

Options are such a niche that even in RL they are traded by a minority, they are conceptually more complicated than "regular" trading.

Leave options be, first let's get a real exchange or futures or something simple (hint: we won't), then we may worry about options.


The reason you won't is that you can't create a system where there is no significantly enforceable penalty. It's too easy to create new accounts.

In the real world you go to jail, fined, barred from trading etc... In eve you just gloat on the forums, biomass a character, worst case scenario get a new account.

If contracts are 100% covered and put into escrow. Futures and Options are pretty darn similar, I'm sure ccp could implement their own system with 100% escrow pretty easily.

It obviously would be a minority using the system but I'm sure some of the bigger industrials and alliances wouldn't mind the ability to hedge their costs and speculators wouldn't mind the ability to earn some income on their stocks.
Tupp Highgate
Basic Boats and Modules Corp
#17 - 2013-04-10 09:36:46 UTC
I was thinking exactly the same thing. It would be horrible to manage though. We'll need a central clearer, which would make it impractical to work. The jita scammers would kill it.


However using something like the Bulk Trade mail list you could offer "Forward Contracts" on an OTC basis not futures contracts. This would be a great start. This would help industrailist and miners alike.

Trying pricing an implied vol rate for a ATM 6month Call on Tritainum......
Oska Rus
Free Ice Cream People
#18 - 2013-04-10 13:15:57 UTC
I thonk eve market system is fine as it is. Simple enough for my peasnts brain. :D