RE: Trading with Bitshares: Profiting from Margin Calls

[ppitonak]

1. Will "margin call price" follow settlement price in both directions?
2. What happens if feed price decreases a lot so that the collateral is high enough? Will the margin call be cancelled?
3. I guess that usually the account that was margin called will not own the asset (in this case bitUSD) but this asset had been sold to third party. How will the situation in the picture look on that person's account?

Comments

[finpunk]

I'm not exactly an expert on the nuts and bolts of Bitshares' internal working, so if you still have any questions I highly recommend posting to their forum: bitsharestalk.org

Nonetheless, here goes:

1. Yes, the margin call price is dynamic and goes up and down with settlement. You can actually remove excess collateral at any time (which is nice!), and you can add collateral when you see the price moving against you.
2. I'm not sure about called positions being taken off the order book once input. I doubt it.
3. The original buyer of the asset from the person who borrowed it and put it up for sale is not involved in the margin call process; assets purchased can be held indefinitely.