Looking critically at the aftermath of the great DAO heist of 2016
June 23, 2016 Geneva / London / Hong Kong
By Gavin Smith, Chief Executive, First Global Credit
Anyone interested in cryptocurrency and innovative use of the Blockchain cannot help having heard about the most egalitarian expression of this technology, Ethereum. And anyone interested in the progress of Ether as a DIY cryptocurrency must be familiar with how Ethercoin is being used as the basis of DAOs or decentralized autonomous organizations. DAO is a method for making investment decisions where choices are made by collective agreement not by fund directors.
There already have been a few DAOs but the first one with any traction has been created by German startup, slock.it. Slock.it has members of the Ethereum project team Simon Jentzsch and Stephan Tual on its board. The DAO concept is based on a set of smart contracts that represent investment opportunities presented to the DAO ‘collective’ of investors. Along with buying tokens to the DAO comes the right to vote on which opportunities the DAO takes a position in. The view being that decisions made by consensus will be more profitable as the intelligence of all the investors is behind the selection. Investment utopic dream?
That dream turned into a nightmare last Thursday with news that of the $150m invested in the slock.it DAO at least $60m has been withdrawn by a “hacker” who exploited a vulnerability in the script that governed distributions from the DAO.
The flaw that is at the root of the DAO security problem is based on what first appears to be the strength of the Ether model with its embedded scripting language. Ether permits individuals or organizations to develop powerful smart contracts with complex behaviours. Unfortunately, this flexibility goes hand in hand with the risk that the implementation of a particular solution is not well thought through. This leaves customers of the smart contract (or in this case DAO) at risk of faulty contract implementation with weak security.
This risk has always been played down by the prime movers of the Ethereum project but the fact that the management of Slock.it is also made up of some of the core development talent of the Ether project proves that this risk is not only valid but also not easily overcome – after all, if these developers can’t get the security model right how are others supposed to?
This issue, however, pales into insignificance when compared to the much larger concern … what happens now that the hack has been discovered?
One proposed response to the hack is to roll back the Ether Blockchain – while appearing attractive at first, this route, if taken, has far reaching consequences for Etherium’s future.
Nobody condones the siphoning of funds from the DAO but it should be remembered that this project was highly experimental and participants took part in something that was largely untested with significant risks.
The strength of a public blockchain, which Ether claims to be, has always been the irreversible characteristic of any transaction. Once a transaction has been confirmed it cannot be unwound by any individual or group – this is the very strength of Bitcoin and why attempts to replicate Bitcoins’ benefit structure using private blockchains is a flawed premise – while private blockchains provide benefits of efficiency for member organisations to transact business together without holding counterparty risk, they are by nature limited in their scope, not designed to ‘include’ but exclude participants. In other words they are designed to benefit the “elite few” who run the private blockchain, for instance a select number of banks who wish to extend their cartel with greater efficiency but no benefit to the greater public.
If the Ethereum Project decides to roll back the Ethereum blockchain they simply confirm the charge that is often levelled at Ethereum – it is not a public blockchain at all but a private blockchain developed to move control of the financial industry from one set of hands into another, benefiting Vitalik Butterin and his buddies.
While many would argue that there is no harm in rolling back transactions that were a deliberate exploitation of a weakness in Slock.It’s implementation of the scripting language. You don’t have to dig too deeply to recognise the flaw in this logic.
Is the Ethereum Project going to roll back all future hacks – or just those involving members of the inner circle? What constitutes a hack? One of the proposed uses of Ether smart contracts is an exchange (say for Bitcoin) – If the smart contract incorrectly makes multiple sales at a low price which people identify and exploit – will those transactions be rolled back as well?
Perhaps a smart contract takes place between 2 organisations, one of which is inside the favoured circle of the Ethereum Project – let’s say they decide they don’t like the terms and want it rolled back – does their request get actioned while the other organization foots the bill?
What quickly becomes apparent is that once you lose the irreversible characteristic of the transaction; When it is no longer an independent network that confirms transactions you no longer have a trustless P2P network – you have crony capitalism and you are simply perpetrating the worst characteristics of the old world financial industry order.
This event represents a critical decision point in Ethereum’s evolution. Do they go down the route of a distributed P2P network with irreversible transactions (which probably means abandoning proof of stake in favour of proof of work) or do they go down the route of a private blockchain with control retained by the select few?
For our part the First Global Credit company will continue to allow holders of Ethereum to use it as collateral for stock and futures trading but, for the time being, our Smart Contract work will remain focussed on Bitcoins’ capabilities. Ethereum, for us, is still a work in progress which we will continue to monitor with interest.
The success of the First Global Credit Trading competitions is due to the ingenuity and persistence of the people who choose to take part. We have old friends who have traded with us from almost the beginning. These people have profitable live accounts, who like the challenge of pitting themselves against others. We have other people who have never traded with us before.
Each competition is different, not only because the people taking part are different but because live market conditions are always in flux, always presenting new challenges. This time, traders who made the bulk of their money trading bitcoin FX were going to have a hard time making headway. The only thing in their favour, it’s a level playing field and all the bitcoin fx traders were going to have a hard time making a profit. But in the Fantastic Four Competition a higher number of players used bitcoin FX to try to increase their competitive edge.
It is also interesting to note that of all the people taking part in the competition, over half of the traders playing were at least somewhat in profit. But among those traders who were profitable 1.2% of them made over 70% of the profits. Since there could be only 4 winners, I think it should be noted that people really made an effort to aggressively trade a wide variety of strategies. And for so many people to be profitable during very difficult trading conditions speaks to the quality of the people taking part. So without further delay, I’d like to introduce you to the diverse and interesting group of traders who have won the Fantastic Four Trading Competition.
Winner – Futures Trading Category
Name: Alejandro Alvarez
Day Job: Serial Entrepreneur, Computer and Network Security Expert
Location: Malaga, Spain
Specialty: Futures Trading
Interviewer: What was your strategy that let you do so well in the competition?Alejandro is a serial entrepreneur and father of 4 who not only enjoys futures trading, but a rich and active lifestyle as well. He has not taken a position in bitcoin but observes several groups. He has seen several of First Global’s competitions advertised, but his interest was piqued when he saw that this time we had added futures to the roster of available markets.
I have learned not to trade the noise. I risk enough to maximize my available capital though I was a little overinvested several times during the competition. But I have learned to be patient, waiting for the right moment to enter the market. Once I am in a trade, if I’ve got the direction right, I hold onto it and add to my position. When I believe the conditions are about to change, then I exit. To judge the market conditions for a trading decision I analyze interrelated markets.
Interviewer: Which futures did you trade to win the competition?
I only traded the S&P, 10 Year US Treasury Notes and Gold. I did not use currency switch to move out and into bitcoin.
Interviewer: When you start trading the winning account, what are your plans for the profits you will make?
I plan to start immediately. I’m not interested in using the profits. I plan to leave them in the account to let the capital increase.
Interviewer: Did you discover or learn anything during the competition you’d like to tell us about?
I learned that you have to be aware that anything can happen. You need to be ready for unexpected things.
Interviewer: Is there anything you might have done differently in hindsight.
Yes of course, always. But asking that question is not useful because in real time you never know what will happen. Hindsight is 20/20.
Interviewer: Tell us about any memorable trades you made during the competition?
I remember one long S&P trade where I went long at 2030. I added to the position several times and exited at 2080. In hindsight I exited too soon as the market eventually reached 2105!
Winner – Stock Trading Category
Name: Perica Vukelj
Day job: Software developer
Specialty: Stocks and options
Perica is a happily married software developer living in the beautiful country of Montenegro. He has a daughter who is very important to his happiness. While he works in development, he is also a bitcoin holder who likes to occasionally trade stocks and options. We interviewed him to find out how he did so well in the stock trading category and to learn a bit more about his trading style.
I first learned about the Fantastic Four competition on the NewsBTC website. “I said to myself, this is great! Exactly what I needed. Now my bitcoin can be put to work. Because it was always annoying to me that the capital I have in bitcoin is just sitting there ‘only in bitcoin’. It is time consuming and expensive (trading fees and the time for international bank transfers) to be in bitcoin when I am bullish and when I am not so content with bitcoin to need to get fiat from a bitcoin exchange and put it somewhere else. And if I’m wrong and pull out of bitcoin, (which I am very often) I may miss big move and later get less bitcoins for the same money.
I love competitions and competing. After all, trading is, itself, a sort of competition, (In my humble opinion). So I decided to try for myself in the Fantastic Four Competition. I didn’t think I could get to the top of the list but with a bit of luck I did.
It was great experience. When you are competing there is always pressure to trade. During normal trading you might pass on some opportunities because you are not so confident. But in a competition you have to give it a try – after all the other competitors probably won’t pass on it. Also, you never know how close the other traders are behind you and how far away are the ones ahead of you! This pressure kept me trying to give my best every day. Keep looking for new trades all the time. It was fighting market moves and fighting with other competitors at the same time.
Winner – Bitcoin Fx Trading Category
Name: Eric Stein
Day job: Entrepreneur, Master trader, guitarist and Search Engine Optimization specialist
Location: Chicago, USA
Specialty: some stocks, some futures, bitcoin
Eric is a true Renaissance man who at age 35 has been involved in the bitcoin ecosystem since 2013. His most recent accomplishment is the launching the ‘bitcoin drudge report’ at http://Bitcoins.sx. He obtained many of his own bitcoins through mining. We caught up with Eric during a break in his hyper busy schedule to ask him about his opinions about the trading competition and the bitcoin market in general.
Interviewer: Do you use bitcoins to buy things?
Sure! When I can. I love supporting the bitcoin ecosystem.
Interviewer: What was the strategy that let you do so well in the competition?
I traded some stocks, had some good runs. Also traded a few futures but I did not have much luck in futures. Then I moved all my profits into bitcoins.
Interviewer: Do you have an opinion on why bitcoin has started to rise recently after having traded in a range for so long?
Yes, I believe it is due to increased mainstream adoption, increase in news exposure, increased blockchain believers, etc. I believe it is still way under priced.
Interviewer: Do you have any ideas about what will move bitcoin towards mainstream acceptance? Large merchants like paypal and amazon directly accepting bitcoin will help – or when they start using some kind of blockchain technology.
Interviewer: What do you think the price of bitcoin will be a year from now?
$999,999 per coin!
Interviewer: Would you like to build a career based on trading?
Yes. I want to be the worlds’ greatest cryptocurrency trader.
Interviewer: When you start trading the winning account, what are your plans for the profits you will make?
I will grow my portfolio to be holding millions of dollars’ worth of bitcoin.
Interviewer: Did you learn anything during the competition you’d like to share?
Yes. I learned a ton. Go big or go home. Stay focused, stay non-objective and stay fearless!
Interviewer: Is there anything you might have done differently in hindsight.
Stay focused and don’t jump into moves without the proper due diligence. Look at charts at different time scales.
Interviewer: Is there anything else you would like to say about bitcoin or the trading.
Yes. Bitcoin TO THE MOON!
Winner – Overall Trading Category
Name: [let’s just say] Entheogenism
Day job: Full time trader/gambler/ Entrepreneur
Location: Somewhere in the USA
Speciality: Stocks and currency
Here’s a cross section of his comments about the competition and cryptocurrency in general.I originally ran into Entheogenism on the bitcointalk.org forum and invited him to join the competition. He did join and by the end had achieved a top rank. Entheogenism is full of strong opinions and is absolutely another Renaissance man with a huge number of diverse interests. Among these accomplishments he is a self-styled crypto enthusiast and decade-long FX and stock trader. A transhumanist-futurist, creative writer, ambitious person interested in space colonization & human enhancement. His twitter profile is @Entheogenism for those that want to connect more directly with him.
I use Bitcoin & Ethereum to gamble on dice & gaming sites. I would use btc to pay Lyft, AirBNB and Expedia if I needed to, but this hasn’t come up yet. I also use bitcoin to buy on Steam or buy Amazon / Walmart gift cards & turn to fiat to pay bills.
Thoughts On himself
I belong and am active in transhumanism/futurism groups a lot more than crypto-related ones. However, I’ve been an active BitcoinTalk forum member since Feb. 2014 and have been on some other crypto forums as well, though sparingly. I’ve used bitcoin faucets since 2014. I use them even now, though much less than years ago, of course. I believe free or ad-based crypto/wealth distribution to unbanked and/or poor people is extremely valuable because otherwise they cannot participate online.
Thoughts on the competition and the FGC platform
During the competition I did not use the currency switch system. As far as I am concerned it would be simpler, more elegant & convenient to simply add FX currency pairs trading instead. I found your platform intriguing in that though it lacked FX, it did offer individual stocks. A ridiculously broad amount of them, in fact, far more than any FX broker or bitcoin site you’ll find (and I’ve reviewed almost all of them, for years). The ETFs & bond/Index Futures you offer are intriguing, however, they don’t seem practical except for a several-months/years even, style of trading, as those instruments take eons to manifest (finally) some macro price moves, compared to individual stocks. So, I focused my trading on the DOW (DIA), NASDAQ and the biggest IT Tech stocks exclusively. I made most money with NASDAQ by far.
Thoughts on bitcoins
BTC/USD price dynamics in 2009-2013 reflected the fact this was a new technology that changed the world dramatically, with unknowns as fundamental as ‘Gregory Maxwell in 2011 thought he would go to jail for working on bitcoin’ and ‘Satoshi was so uneasy about being a bitcoin dev/founder that he eventually disappeared in 2010, leaving matters to Gavin Andresen.
So, here you had something that the world had never seen before, suddenly creating a gold rush, yet with ginormous precedents worrying people about ‘going all-in’ on this: Liberty Reserve, 2012-2013 legal troubles. MegaUpload. Napster. eGold. There were so many internet projects that were similar in a lot of ways, that had got shut down, before BTC, that people were afraid, the whole way, until in November 2013, the US Congress, widely expected to eyebrow negatively BTC if not outright try to ban or illegalize it – Instead, acclaimed that crypto/bitcoin was a positive invention!!!! They were happy people would use it!!!! WHAT?? REALLY? So of course the price went ballistic in mid-Nov-2013 up to late December, by which time China’s involvement had come to a serious stopgap due to their central bank forbidding any big finance institution from using BTC (as it was deemed too risky/destabilizing).
These 2 giant BTC price bubbles in 2013 deflated dramatically in early 2014, helped even more by Mt. Gox’s final collapse. Crypto then took 1.5 years to recover from this drop, even as institutional & corporate investment flooded the scene. In late 2015 after the August stock market global scare (from China), wealthy Chinese were extremely worried about capital controls being imposed. So, they rushed to BTC, for the first time in such numbers again, since 2013. This was in addition to the russian MMM ponzi’s need for a useful utility vehicle to move funds around – bitcoin was perfect for this. When these inflows pumped BTC’s price in Oct 2015, people took notice. They had long awaited the signs of the ‘pump’ which should come from nearing the July 2016 block reward halving btc event. So, as soon as they saw this rise, they jumped in. This pyramid effect is what caused the price, relatively stagnant / hitting bottoms throughout 2014-2015, to finally rise & maintain such higher floors, during late 2015 & all of 2016 so far.
Winner prize accounts will be opened tomorrow. You’ll be able to follow the winners and watch their returns climb on the FGC blog or by following us on @firstglobalcredit on Twitter. and future articles on performance.
At 36, Paul Keane is an ‘old hand’ in the young world of digital currencies. He’s an extremely active member of the bitcoin community a member of the Bitcoin Foundation, he also belongs to 2 chapters of Michigan Bitcoiners, Detroit M.B. and Ann Arbor M.B. as well.
Cryptographer, API developer, bitcoin miner since 2011, bitcoin evangelist and altruist, Paul is happy to reach out and assist people who are serious about digital currency. Along with friends he is working on a number of web-based digital currency projects and you can catch him on social networks like Google plus, Facebook and LinkedIn.
Paul is a member of the First Global Private Trading Group. Members of the group are provided with part-funding by FGC and limited risk. The goal is to develop talented young traders and help them develop their skills, make money and enliven FGC’s growing community of traders.
Paul approached First Global with a number of really interesting stocks he wanted added to the platform. His stock picks are really well thought out so I asked his permission to share them with you which he graciously granted. Here’s what Paul has to say about his choice of interesting stocks to trade.
☆Palo Alto Networks – NYSE Symbol PANW – This is a monster. Pricy, but the P/E on it is extremely high plus it’s undervalued. That as perfect as you can get. I have it hitting 195 ish by December. They just posted their largest revenue rise in 10 quarters. They are very innovative in Cyber Security.
☆Box – NYSE Symbol: BOX – A very innovative cloud storage firm. Have had around 42% growth since going public this year, but it’s still cheap and the valuation is huge. They do a large amount of business with large corporations down to small business and the general public. Had revenue for Q2 at 69 million, original valuations put Q3 at 74 million in revenue but new projections are right at 77 million in revenue dollars.
☆Celgene – NASDAQ Symbol: CELG – A Biotech company with a P/E of 46.72, my figure, undervalued and so very high P/E, it will be one I will be involved in around October. Though it’s cheap enough now to make small gains.
PK: These next two are a direct result of APPLE’s new/old products being released, there is one you have listed on the FGC site that will boom with this launch, ACTIVISION BLIZZARD. No need to explain that one.
☆Electronic Arts – NASDAQ Symbol EA – Games have been developed for the conference and Apple has made a large order for games to be bought through iTunes. [I think it] shall take off in a couple weeks when the new os9 is released with the iPad Pro and iPhone 6s & 6s plus. Update will allow last year’s iPhone 6 & 6 plus full use.
☆Adobe – NASDAQ Symbol ADBE – FINALLY Adobe is compatible with Apple. Very, very high demand. Also the new software is going to be fully compatible with Windows believe it or not. The two giants did a presentation together. Steve Jobs is rolling in his grave.
Paul can be contacted through his Linkedin Account or Facebook page.
Would you like to apply for a position in the Private Trading Group? Email email@example.com for further information.
There’s a lot of discussion about capacity of Bitcoin mining, how do we ensure fair and timely transaction processing? What will happen when there are no more bitcoins to mine? And so on.
This came to a head recently with Gavin Andresen’s proposal to create a hard fork to increase the block size.
You will be pleased to know I’m not going to steam into this debate but instead focus on the concern that this raised about centralisation of mining and transaction processing activity.
This concern has raised its head under many different guises in the past, most recently the concern last year about the possibility of certain mining pools (or future pools) gaining over 51% of the processing power thereby giving them the theoretical ability to introduce fake transactions into the blockchain.
While these problems are currently hypothetical they are, nonetheless, a very real concern for Bitcoin and the Blockchain.
As participants in this market we sometimes have a tendency to watch on and consider it somebody else’s technical issue to resolve and move on with building our business…but hold on. As a business we are completely dependent on the Blockchain.
Our entire business model revolves around allowing individuals who believe in bitcoin to use the value of their currency to invest. We and most other businesses offering products in the cryptocurrency space simply don’t have a business without the Blockchain. We have a responsibility to this ecosystem; to maintain its effectiveness and to ensure its fairness.
With this in mind we, at First Global Credit, are initiating a policy of committing 1% of our revenue to mining activity…not as a revenue generation tool (we are likely to make a loss on the investment as our data centres are geared for security, not for economy) but as a small contribution back to the ecosystem.
I know some in the space will complain that this is another nail in the coffin of the small, independent miner. This is a valid concern but I would suggest a small price to pay to ensure that we continue to maintain a fair and effectively functioning Blockchain.
Just our investment will have a negligible impact to the cause of ensuring decentralised mining activities continue to operate to support the Bitcoin blockchain…but if every exchange, every merchant processor, every wallet provider and every other company, large or small, operating in this space makes a similar commitment then we will start to see an impact.
We can’t afford to sit back and treat the Blockchain as a gift that will keep on giving…for free. If we all take responsibility for ensuring the continued success of the Blockchain by paying back into the ecosystem then we all stand a much better chance of prospering with an efficient, transparent, and secure Public Ledger.
As for the technical debate about larger block sizes or not, I’ll leave that debate to people who can offer an informed opinion.
The latest news round up for trade-able items on the First Global Credit platform, covering:
- Amazon.com, Inc
- Biogen Idec, Inc
- Cisco Systems Inc
- Darden Restaurants
- Dow Jones Industrial Average
- Salesforce Inc
Amazon.com, Inc. (NASDAQ:AMZN)
Amazon.com, Inc. (NASDAQ:AMZN) is taking a page out of the playbook of Apple Inc. (NASDAQ:AAPL) by using solar energy farms to go green.
The online retail giant announced Tuesday it’s helping the building and operation of a $150 million, 80 megawatt solar farm in the state of Virginia. It partnered with Community Energy Inc. It’s scheduled to be completed and in operation by Oct. 2016 in Accomack County on the state’s eastern shore.
Amazon has previously been criticized by environmental advocacy groups like Greenpeace. The organization claimed Apple Inc. (NASDAQ:AAPL) and International Business Machines Corp. (NYSE:IBM) had given more information on their energy consumption and aims.
Bitcoin is trading relatively flat since yesterday as bulls and bears sweat it out to turn the battle in their favor.
Bitcoin is in the consolidation zone now as investors take stock of the situation. The sideways movement may continue for the next 24 hours as there are no foreseeable triggers. Remain patient and wait for convincing signals from the market, such as a breakout, to create fresh trading positions. Buy if the resistance is breached, and sell if the support is violated. Put in place strict loss checks to minimize the risks.
Biogen Idec Inc (NASDAQ:BIIB)
Biogen and Samsung Bioepis Co., Ltd today announced that results from their anti-TNF biosimilar portfolio are being presented at the European League Against Rheumatism Annual Congress in Rome, June 10–13, 2015.
Biogen Inc. (BIIB), valued at $91.19B, opened this morning at $382.97. Today’s price range has been between $378.00 and $388.27 per share with a trailing 52-week range being $290.85 to $480.18. BIIB shares are currently priced at 22.87x this year’s forecasted earnings, which makes them relatively expensive compared to the industry’s 2.06x earnings multiple for the same period.
For more go to: http://jutiagroup.com/20150610-market-update-biogen-idec-inc-nasdaqbiib-biogen-and-samsung-bioepis-announce-new-data-for-three-anti-tnf-biosimilar-development-candidates-at-eular-2015-congress/
Cisco Systems Inc (NASDAQ:CSCO)
Shares of Cisco Systems rose by 2% to $28.81 in Wednesday’s afternoon trading session after the multinational technology company said that it is planning to sell $5 billion in bonds to boost its equity.
The maker of networking equipment intends to use proceeds for general corporate purposes, including the return of capital to shareholders through the repurchase of common stock and dividend payments.
Cisco will offer debt in five parts, with the longest maturity a $500 million 10-year note, yielding as much as 1.1% points more than comparable Treasuries, sources told Bloomberg.
Darden Restaurants (NYSE:DRI)
Darden Restaurants stock had its “outperform” rating reissued by research analysts at Oppenheimer in a report released on Wednesday. They currently have a $75.00 price objective on the restaurant operator’s stock. Oppenheimer’s target price would indicate a potential upside of 15.37% from the stock’s previous close.
Shares of Darden Restaurants traded up 1.65% during mid-day trading on Wednesday, hitting $66.08. 272,993 shares of the company’s stock traded hands. Darden Restaurants has a 52 week low of $43.56 and a 52 week high of $70.38. The stock’s 50-day moving average is $64 and its 200-day moving average is $62. The company has a market cap of $8.31 billion and a P/E ratio of 12.55.
Dow Jones Industrial Average
Signs of progress in negotiations over Greece’s debts helped launch a stock market rally, snapping a week-long slump.
All 30 stocks in the Dow Jones industrial average and all 10 industry groups in the S&P 500 index made gains. The Dow Jones industrial average rallied 236.36 points, or 1.3%, to 18,000.40, while the Nasdaq composite gained 62.82 points, or 1.3%, to 5,076.69.
Gold futures moved up for a third straight session to settle at a one-week high on Wednesday, with investors opting for the safe haven appeal of the precious metal as the dollar trended lower against some major currencies and continued focus on the developments in Europe over Greece’s financial debt woes.
Gold for August delivery, the most actively traded contract, gained USD9.00 or 0.8% to settle at USD1,186.60 an ounce, on the Comex division of the New York Mercantile Exchange on Wednesday. Gold for August delivery scaled an intraday high of USD1,191.80 and a low of USD1,174.30 an ounce. On Tuesday, gold prices gained USD4.00 or 0.3%, to settle at USD1,177.60 an ounce, as the dollar trended lower and investors focused on the Greek financial debt woes with no resolution in the horizon.
Salesforce inc (NYSE:CRM)
Salesforce insider Parker Harris sold 5,000 shares of the stock in a transaction that occurred on Tuesday, June 9th. The stock was sold at an average price of $71.73, for a total value of $358,650.00. Following the sale, the insider now directly owns 22,812 shares in the company, valued at approximately $1,636,304.76. The transaction was disclosed in a document filed with the SEC.
Shares of salesforce.com, inc. traded up 1.69% during mid-day trading on Wednesday, hitting $72.97. 1,085,841 shares of the company’s stock traded hands. salesforce.com, inc. has a one year low of $51.04 and a one year high of $78.46. The stock’s 50-day moving average is $71. and its 200-day moving average is $64.. The company’s market cap is $47.87 billion.
Netflix Inc. rose after investors approved a proposal that paves the way for a stock split, and a deal was announced offering the video service in Marriott Hotels.
Netflix, the largest online subscription video service, rose 3.7 percent to a record close of $671.10 in New York. The stock, the top 2015 gainer in the Standard & Poor’s 500 Index, has almost doubled this year, giving the Los Gatos, California- based company a market value exceeding $40 billion.
I’ve been quiet for the past 2 months about predictions because I strongly believe that if you have nothing of value to say then don’t waste peoples time. However, after 2 months of quiet, I thought it was time for an update.
After giving us the opportunity to get long a 50% position at an average price of 223 the market has done nothing but meander back and forth. This behaviour pattern is not uncommon in a market after a period of high volatility and simply signifies a period of value testing – does the market feel fairly priced at this level?
We now need to consider what to do with our small 50% long position.
On the upside I will be extending my position to long +100% if we break above 330 (The market is currently trading at 260 at time of writing). This is a pivot high following the reaction to the 166 lows back in early 2015 and breaking this should see a period of sustained higher price action. On the downside I’m no longer willing to see a loss on this small position so look to place a stop below the recent congestion level at 230.
A final note of caution, recent market behaviour will have made people lazy with stops and undisciplined in their trading; don’t get caught out! Quiet periods like this rarely signal when they end.
The end is likely to come as a sustained move in one direction or another; often not a dramatic surge but a consistent grinding move which will catch people out who are waiting for the retracement to close out. Stick to your stops and your trading discipline.
First Global Credit launches radical new service that turns a significant risk into a profit opportunity
February 16, 2015
First Global Credit’s Currency Switch Service helps shrewd traders turn a significant risk into a profit making opportunity. Customers of either Global Credit Service that allows the use of Bitcoins as collateral to make stock and commodity investments can switch the collateral in their account from Bitcoins into one of four Fiat currencies (USD, EUR, GBP of CHF) at the live market price.
The stock or commodity positions the customer currently holds do not need to be closed to perform the Currency Switch; the existing trades will just now be secured by the Fiat currency in the account instead of Bitcoins. When the trader feels the moment is right they can switch back into Bitcoins at the current rate. A modest transaction commission of 0.1 percent is charged if the trader is a price maker; placing an offer above the market or a bid below the market, or 0.2% if the order is ‘at market,’ wherever the market is currently trading.
Bitcoin’s price has recently been subject to substantial volatility and has at times in the last few weeks lost or gained as much as 20% of its value in a single day. This can expose those holding Bitcoins to considerable risk if they can’t divest themselves quickly enough to protect their portfolio’s value.
“The Currency Switch Service provides a benefit over other Bitcoin Exchanges by allowing our customers to actively trade both stocks and Bitcoin movements with the same collateral, doubling their opportunities and increasing the potential for portfolio growth,” stated Marcie Terman, Communications Director at First Global Credit. “This service supports both customers that want to enhance their returns and customers that are concerned about short term exposure to Bitcoin’s price fluctuation.
For more information including FAQ’s please go to http://firstglobalcredit.com/Services/Collateral-Currency-Switch-Service.
About First Global Credit:
First Global Credit is the world’s first Finance Company 100% focused on digital currency products. The company has been founded by financial service professionals with 35 years’ collective industry experience. The objective, to help our customers maximize the potential derived from their investment in the digital currency markets. To deliver those services with a stability and reliability not generally found in digital currency focused companies. We are committed to assisting our customers achieve their economic objectives and to do this our systems have been built using enterprise level technology and security. Our processes are designed to assure the privacy of our customers alongside the security of their assets. The company is committed to developing a stable and secure digital currency capital market; to provide an environment which will prove fairer, more accessible, and less costly for the public to transact business than existing banks and financial institutions.
Well…what a month. I hope you followed our advice and kept to your stop discipline which got us out of our tentative long position at 250 before the collapse down to 166. Since then we’ve kept out of the market to see what transpires.
Looking at the chart you can see that the trend is still down, so we should be playing this market from the short side. But there’s something in the way the market is behaving that makes me more inclined to still trade this from the long side – but very cautiously.
Our recommendation is to take a small 25% long position at the current level (226 as I write this) with a further 25% long at 220. Initial stops should be placed below 200.
On the basis of how quickly this market can move we will also give a short break recommendation. We will be looking to go short a full 100% of the way on a break below 160. We don’t believe this is the scenario that will unfold but if it does we can see a quick spike down a further $30 where we will look to cover our shorts (at the $130 level).
Over the past few days market action is starting to look mildly constructive; It is encouraging enough to suggest that we dip our toes back into the market.
We are entering to buy of a 25% position at the current price (284 at time of writing) with a further 25% bid below the market at 271. Protective stops should be placed below the 250 level. I would recommend a very disciplined use of Stops at the moment as a further slide can’t be ruled out.
We will build on this position if the market starts to trade higher.
First Global Credit
Happy New Year and another sweep down in the BTC price below 290. Followers of our recommendations should now have covered their tentative short position from the 342 level and be flat again.
This latest move down lacks conviction and backs up our central thesis that we are seeing long term bottoming behaviour in the market with this down move being a re-test of the lows reached in October (275 intra-day); rather than a new impulse move lower.
Stay flat for now until market sentiment becomes clearer. Our recommendation is to place a buy order (1/3 position) on a break back above 340. We don’t recommend placing a buy order at this level or below the current market level as falling markets have an uncomfortable habit of falling further and faster than people anticipate, better to buy after support has been established.
Good Luck for 2015