How to take advantage of high HBD prices - Over 10% profit

in LeoFinance2 months ago (edited)

businessman3950117_1280.jpg

I'm going to tell you how to earn over 10% profit from the HBD market right now.

With the recent hard fork, a new operation was introduced to help keep the HBD price under $1.05.

How does it work?

The new operation is called collateralized_convert. It converts HIVE to HBD at the fixed price of $1.05. It's a little confusing how it converts the HIVE.

Convert on peakd.com:
image.png

Let's assume you want to convert 1000 HIVE to HBD. Your HIVE will be locked as collateral and It will calculate the minimum median HIVE price and give you HBD worth half of your HIVE at that price as a loan. Then after 3.5 days, it will calculate the prices and use the median of 3.5 days then it will take the cost of the given HBD from your 1000 HIVE and return the remaining HIVE to your account.

So if the HIVE price stays stable, you pay exactly $1.05 worth of HIVE for HBD. If the HIVE price goes up, you pay less HIVE for the HBD. If the HIVE price goes down, you pay more HIVE for HBD.

How can you take advantage of this new operation?

You can make a profit using this feature when the price of HBD is over $1.05.
Basically, you buy HIVE, convert it to HBD at the rate of $1.05, and sell it on the external market for a higher price. Repeat as long as HBD is above $1.05.

HBD is currently trading for $1.14 on Bittrex. It also hit higher prices like $1.8 a day ago.

Why HBD goes up?

The market cap for HBD is around 5 million. That's nothing. A fraction of that is on the exchanges. For example, Bittrex is holding 372,058 HBD right now.

The low volume makes it more volatile in the external markets. But it hopefully will be fixed by the new operation as it introduces more HBD into the market.

Where can you find the new operation?

It's already on peakd.com > wallet > click on arrow under HIVE balance > convert.

I couldn't find it in other places. Please comment if it's available on the other front-ends too.

Edit: It's available on https://hive.ausbit.dev/ too.

Final words

Double-check the prices and make sure you are not losing money.
Always try deposits to an exchange with a small amount first.

Another thing to note is the price of HIVE. If it goes up, you will gain even more profit as it will return you more HIVE at the end of 3.5 days. I don't think the impact would be that big because the median price is used.

Enjoy this little opportunity.

Posted Using LeoFinance Beta

Sort:  

Thanks for the writeup, reblogged :)
Convert operations are also available on https://hive.ausbit.dev , just click the drop down menu next to Hive on your wallet page and click convert

image.png

The operation is also available in Hive's command-line interface (CLI) wallet.

But what if by the time I convert the Hive into HBD the price of HBD is below 1.05? I would assume I need to be holding HBD prior to it rising over 1.05?

You receive HBD immediately after the conversion. It only holds half of the HIVE for 3.5 days.
Actually, it gives you a loan at the time of conversion for half of your HIVE and the actual conversion happens 3.5 days later and it returns the rest of HIVE.
It's a little bit confusing but you can try smaller amounts to understand it better.

Quite interesting 🤨 ! I haven’t been paying enough attention to this HBD thing I guess !

Thanks 🙏

The problem is that because the instant conversion takes into account the median hive price, this strategy can be losing even above $1.05 per HBD.

I wanted to do the conversion yesterday when HBD was trading at $1.2 but it was a losing arbitrage.

The median hive price was lower than the market price, therefore the 50% instant conversion was worth less than 50% of the hive I wanted to convert.

The other half of the trade is risky as it depends on the price of HBD when the payout occurs, after 3 days. So unless the instant HBD payout is worth well above half of the hive being converted, the conversion is not worth doing.

At prices like $1.8 per HBD this is definitely winning, but I guess people are already running algos because the pump lasted a few minutes only.

The actual conversion happens after 3.5 days and it calculates the median price at the end. The price used at the beginning is the minimum price of the last 3.5 days.
So, you will get more than half of your HIVE back.

The price used at the beginning is the minimum price of the last 3.5 days.

Thanks for pointing that out, I thought it was the average median price.

So, you will get more than half of your HIVE back.

I know, after the complete trade. I was talking about the first part of the trade only.
For instance, right now HBD is trading at $1.17 and hive at $0.481.

Using the peakd conversion, converting 1 HIVE now, will provide me with 0.21 HBD instantly, and the rest later. Selling the 0.21 HBD for hive at the market price of $1.17 will result in me having 0.51 HIVE, not accounting for exchange fees.

The other half of the trade is a gamble, because we don't know where HBD will be trading in 3 days.

However, the first half of the trade is winning in the previous example. I converted 1 hive and got 0.51 Hive instantly for half the trade (0.5 hive). So that's a 2% gain guaranteed on the first half of the trade, and the rest is unkown.

I already don't love those odds. If the current market price of HBD was $1.14, the conversion would be losing for the instant trade. I would get less than 0.5 hive back instantly.

Therefore, the trade is not always winning when HBD is above $1.05. It is highly dependent on the lowest median price of the last 3.5 days.

In order for me to be willing to take the risk on that trade, the instant payoff has to be very high, to justify the risks of losing on the second half of the trade as well, if HBD trades below 1$, or if the hive market price is far from the average median price.

We cannot assume that HBD will remain at $1.17 for three days.

The first half of the trade also will get recalculated after 3 days taking to account the median price, not the minimum price.

So, if the price of HIVE stays stable for the next 3 days starting from now, you get the HBD exactly at the rate of $1.05.

Oh wow, that's actually a great feature. Thanks for the info, this should be explained in the peakd faq in the convert window.

Hahaha. This is like a bet.
If the price drops, your hive becomes a collateral damage.
I'll give it a try anyways.
Thanks for the info

Yes. But I don't think it would affect too much because the median price is used.

Right now, there is a push on the HIVE price and it most likely will go up or at least, not drop much. So the chance of more profit is higher than a possible loss.

Regardless, the risk is there.

Okay.
I see that too.

What if Hive goes above 1$ ?

If HIVE goes up after you convert, you will get more HIVE back after 3.5 days. Although you receive the HBD immediately after conversion, the actual conversion happens after 3.5 days.
It's a little bit confusing until you try it yourself.

Yes, you get more hive because the median price is lower, but you still lose compared to hodling hive.

Replied to your other comment as well.
The price will be recalculated and you will get more HIVE at the end. The actual price would be the median of the next 3.5 days.
The price used at the beginning is different. It's the minimum of the last 3.5 days.

You missed my point here. The market price and median price can be very different. If the median price after 3.5 days is $0.5 and the market price of hive is $0.6. It would have been better to just hodl hive instead.

This means that the arbitrage is worth taking using stablecoins, by buying hive then initiating the trade.

But if you hold hive and wanted to use that hive for the arbitrage, you would have been better off just hodling.

Let's say you convert 1000 HIVE right now. You get 209 HBD. You sell HBD and buy HIVE.
After 3 days, you get the rest of your HIVE. If the price was higher, you get more HIVE. If the price stays stable, you pay exactly $1.05 per HBD.

So either way, you profit. i.e. you gain more HIVE than you had

I must be missing something here. What do you mean by "you get more hive"? The conversion is hive --> HBD, so do you mean to say "you get more HBD" ?

Sorry if I couldn't explain it better at first.

Your HIVE gets locked as collateral at the beginning and you get x amount of HBD. The actual conversion happens 3.5 days later and the price for x amount of HBD gets calculated. Then some of your HIVE is taken for the price of HBD and the rest is returned to you.
If the price for HIVE goes up, you end up paying less HIVE for x amount of HBD. So you get back more HIVE.

Also, Peakd is right, if the price of HIVE goes down significantly, you end up paying more HIVE for x amount of HBD, so you get less HIVE back at the end.

The conversion method results in more HIVE gain overall
IF (HBD > 1.05) and (HIVE stable or going up).

I have the same question.... ;)
From his words seems that you get instantly 209 HBD and then after 3 days you get the rest of your hive, so i suppose you get 500 hive if the price stays stable
It is like this because it is a loan?
Or i understand nothing? :)

I have to try

Here are the reason when not to use the conversion tool listed by Peakd in the conversion tab:

UNDERSTANDING WHEN NOT TO USE
IF you can get the volume of HBD you want in a secondary market by selling your HIVE and buying HBD for less than $1.05 then that is more efficient than this conversion process
AND if you personally believe the present value of HIVE will be significantly higher right now than it will be assuming the predicted 3.5 day median average.

The second reason is the issue we are talking about.

The trade remains winning in dollar terms but it is losing in hive terms. A hodl is better, unless I'm missing something and peakd is wrong too.

It is possible to hedge this risk as follows.

Take the HBD you get and instead of selling it for HIVE, sell it for another stablecoin or fiat (one you trust to hold value for 3.5 days). Then use the stablecoin or fiat to buy back HIVE over the course of the 3.5 days. You will end up better off than you started with near certainty.

Wow! This is a good development. I this I'll give it a trial in my next conversion of HBD to Hive for power up. Thanks for sharing.

reads, reads, re-reads.... still doesnt get how it works ... oh well lets try it anyways cause FOMO

I have bookmarked this post. When I have experience, this information will be useful to me. Thanks a lot for the helpful post. I wish you success.

Can HBD be the worth above 5 USD or more anytime for certain period?
Did that happen ever?

It's very very unlikely. Because the conversion would keep it down.
No, not on hive.

It was never 5 USD on Hive but it did go up to about 2.50 USD. That was before the HIVE-to-HBD conversion was added to it is reasonable to expect this to be less likely to happen now, but anything is possible.

Is this thing new or it already existed before hand. Cause this should naturally keep the prices down for HBD as long as people are interested in hive.

it's new with HF25

This is really nice and smart. So impressive. I just sold my HBD through @blocktrades, I will explore using bitrex to know and understand what you just posted. Thanks once again

very good information friend. Thanks for sharing with all of us it would be great if the HBD surpasses that price of $ 1.05 and thus obtain more and better profits.

why hive should converted into HBD.why dollars are not suitable.

Thank you for this ..This is really really helpful

The gains from HBD are so many. I love it. Holding HBD in savings alone is already a huge profit from the returns gotten regularly. As well as the 10% APR.

This is an awesome way to get some little gains through minor trading that anyone can do.

Posted Using LeoFinance Beta

Hi, are you Iranian?

سلام مجدد
خیلی خوشحالم که یک هموطن را اینجا پیدا کردم
پیج بسیار فوق العاده ای دارید
راز موفقیتتون چیه آقا مهدی؟
من امتیازهای بسیار کمی میگیرم با اینکه برای آماده کردن پست هام خیلی تلاش میکنم
ممنون میشم راهنماییم کنید یا شماره تماسی بذارید ازتون کمک بگیرم ممنوم روزتون بخیر

Hichja yek shabe nemishe be jaii resid. Mamolan kheili zaman mibare.
Bayad poshtkar dashte bashid va ba baghie ertebat bargharar konid. Masalan comment gozashtan mitone komak kone.

Ya join beshid chand servere discord va onja chat konid ba baghie. Nemidonam chat irani darim ya na.

Az community haii estefade konid ke be mohtava shoma nazdiktare va faal tare.
Hive felan kochike. User ziad nadarim. Shayad dar ayande behtar beshim. Felan rahesh ine ke be faaliat edame bedid. Rahe khasi nadare.

3speak ham monasebe baraye faaliat age bishtar video mizarid.

Man ro mitonid to servere discorde aslie hive ham peida konid va pm bedid. Ya haminja comment bezarid. https://myhive.li/discord

Sorry english type kardam.

bale kamelan ghabul daram va man ham daram talash mikonam
be hamin khater dar discord hastam ama kami baram pichidas

1 ) esm shomaro nemitonam peyda konam
chon be in format mikhad :
username#0000

2 ) va inke mishe lotf konid link server haye khob dar zamine ; raqs , varzesh , ashpazi , akasi ro baram befrestid ?

3 ) man app diskord ro dar mobilam daram va 4 ta platform ro daram , ama dar discord.com on haro nemibinam bayad chetor peydashon konam ?

4 ) dar servere The Terminal ke shoma ham dar on hastid, ejaze ersal payam nadaram bayad chekar konam aqaye mohandes?

bebakhshid kheili [email protected] porsidam
az khareji ha ziyad porsidam motevajeh manzoreshon nemisham dorost chon motarjem google kheili eshtebah dare.

pishapish azatoon yek donya mamnonam 😊
momkene ba shoma betonam dar whats up sohbat konam ?

Thanks for that nugget of information...

That's cool. I think am ready for the whole gain if properly guided

Hi @mahdiyari
I want to ask. what if I power down hive power mine. What will happen? do i get dollar hive?

Read https://hive.blog/faq.html
If you power down your Hive Power, that will get converted to HIVE over 13 weeks.

Okay thanks bro

hi @mahdiyari
i want to ask, what happens if i power down all power hives i have? can i still post, vote or comment?

Hive Power gives your votes the value and also gives you RC. RC is used when posting, voting, or any other action.
https://hiveblocks.com/@galih.amenk
You can see your RC (Resource Credits) there.
You can vote or comment without Hive Power but not so much. Maybe 1 comment per day.

how did the show change the power hive to HBD/HIVE?

It takes 13 weeks to power down all of your HP. You get 1/13 of it per week.
Hive Power converts into Hive.

do you think it's worth it if I power down all the power hives I have?

If you don't need the money, keep it powered up.
It can help your account grow.

Man can you make a diagram on how this work? like what happen if hive goes above 1$ or hbd goes beyond 1$ etc scenario? How is this sure earn profit from converting right now?