Skip to content

Instantly share code, notes, and snippets.

@MicahZoltu

MicahZoltu/insured_trading.md

Created August 31, 2019 15:04
Show Gist options
  • Save MicahZoltu/6e3740c5025e2ee597b97c35f9b72edf to your computer and use it in GitHub Desktop.
Save MicahZoltu/6e3740c5025e2ee597b97c35f9b72edf to your computer and use it in GitHub Desktop.
Download ZIP
Raw
insured_trading.md

starting

  1. User has 10 ETH.
  2. User wants 10 ETH worth of an insured YES position.
  3. User buys 10 complete sets, giving them 10 YES + 10 NO + 10 INVALID.
  4. User trades 10 NO for x YES on the open market.
  5. User ends up with 10+x YES + 10 INVALID.
  • If the market resolves as YES, they get 10+x ETH (net profit == x).
  • If the market resolves as NO, they get 0 ETH (net loss == VAR).
  • If the market resolves as INVALID, they get 10 ETH (net neutral).

close at profit

  1. User has 10+x YES + 10 INVALID, they put in 10 ETH originally.
  2. User sells y YES for 10 NO on open market (where y < x).
  3. User sells 10 complete sets, giving them 10 ETH.
  4. User ends up with 10 ETH + (x-y) YES.
  • If the market resolves as YES, they end up with 10+x-y ETH (net profit == x-y).
  • If the market resolves as NO, they end up with 10 ETH (net neutral).
  • If the market resolves as INVALID, they end up with 10 ETH (net neutral).

close at loss

  1. User has 10+x YES + 10 INVALID, they put in 10 ETH originally.
  2. User sells y YES for 10+x-y NO on open market (where y > x).
  3. User sells 10+x-y complete sets, giving them 10+x-y ETH.
  4. User ends up with 10+x-y ETH + y-x INVALID.
  • If the market resolves as YES, they end up with 10+x-y ETH (net loss == y-x).
  • If the market resolves as NO, they end up with 10+x-y ETH (net loss == y-x).
  • If the market resolves as INVALID, they end up with 10 ETH (net neutral).
Sign up for free to join this conversation on GitHub. Already have an account? Sign in to comment