[quote author=PhantomPhreak link=topic=208.msg1688#msg1688 date=1396228202]
[quote author=Global_trade_repo link=topic=208.msg1687#msg1687 date=1396223881]
I don’t think it’s a good idea to implement cancellation of all orders for fractional callbacks. The reason is it doesn’t make functional sense whereas cancellation of all open orders for a 100% callback makes perfect sense.
[/quote]
I don’t follow. Can you elaborate a little on this point?
[/quote]
A 100% callback of an asset implies it may not be traded anymore so cancelling all open orders makes sense. A person trading a callable asset needs to be aware of this and would likely pay a discount on a callable asset vs a non-callable asset.
If a fractional callback of an asset cancelled all open orders, the btcpay side, disproportionate amount of btc fees would be lost (If it was after the call date, and I was purchasing a callable asset on the DEX I would discount the price of the asset considering that 100% of the asset could be called). If an asset could be called back fractionally many times, it would be difficult for anyone to be able to price fair value for the asset. As a result it wouldn’t really be a feasible instrument.
If the desired effect of calling back fractions of an asset could be done in alternative ways, such as a buyback order on the DEX then I think it would simplify things to remove fractional callbacks.
Alternatively, one way I can think of to keep fractional callbacks is to introduce an additional parameter at asset issuance time which specifies a maximum amount of asset that is callable. That way I can properly discount the fraction of the asset which is callable. The possible market disruption of a fractional callback (which cancels all open orders) could then be priced into the cost of the asset so it would be then acceptable.
[quote author=Global_trade_repo link=topic=208.msg1691#msg1691 date=1396234902]
[quote author=PhantomPhreak link=topic=208.msg1688#msg1688 date=1396228202]
[quote author=Global_trade_repo link=topic=208.msg1687#msg1687 date=1396223881]
I don’t think it’s a good idea to implement cancellation of all orders for fractional callbacks. The reason is it doesn’t make functional sense whereas cancellation of all open orders for a 100% callback makes perfect sense.
[/quote]
I don’t follow. Can you elaborate a little on this point?
[/quote]
A 100% callback of an asset implies it may not be traded anymore so cancelling all open orders makes sense. A person trading a callable asset needs to be aware of this and would likely pay a discount on a callable asset vs a non-callable asset.
If a fractional callback of an asset cancelled all open orders, the btcpay side, disproportionate amount of btc fees would be lost (If it was after the call date, and I was purchasing a callable asset on the DEX I would discount the price of the asset considering that 100% of the asset could be called). If an asset could be called back fractionally many times, it would be difficult for anyone to be able to price fair value for the asset. As a result it wouldn’t really be a feasible instrument.
If the desired effect of calling back fractions of an asset could be done in alternative ways, such as a buyback order on the DEX then I think it would simplify things to remove fractional callbacks.
Alternatively, one way I can think of to keep fractional callbacks is to introduce an additional parameter at asset issuance time which specifies a maximum amount of asset that is callable. That way I can properly discount the fraction of the asset which is callable. The possible market disruption of a fractional callback (which cancels all open orders) could then be priced into the cost of the asset so it would be then acceptable.
[/quote]
I see what you are saying, but this concern seem [very theoretical. The question really comes down to this: should functionality be restricted to avoid the potential increase difficulty of price discovery? I would argue that the issuer of a callable asset is the one responsible for making sure that potential buyers on the DEx have a solid reference point for pricing.
I’ve just tentatively implemented the order and order_match cancelling part of callbacks, and it’s enabled on testnet. Callbacks are temporarily disabled on mainnet until this functionality has been tested.
Callbacks will be infrequent, by design, so let’s revisit the issue of fractional ones later. The problems for price discovery, if the issuer isn’t intentionally screwing with the holders of his asset (which he could do more effectively otherwise), should be minimal.
[quote author=cityglut link=topic=208.msg1715#msg1715 date=1396544328]
I see what you are saying, but this concern seem [very theoretical. The question really comes down to this: should functionality be restricted to avoid the potential increase difficulty of price discovery? I would argue that the issuer of a callable asset is the one responsible for making sure that potential buyers on the DEx have a solid reference point for pricing.
[/quote]
[quote author=PhantomPhreak link=topic=208.msg1716#msg1716 date=1396548002]
Callbacks will be infrequent, by design, so let’s revisit the issue of fractional ones later. The problems for price discovery, if the issuer isn’t intentionally screwing with the holders of his asset (which he could do more effectively otherwise), should be minimal.
[/quote]
It’s these rare or tricky functional scenarios that keep me interested 
I’d suggest that myself and some investors wouldn’t want be holder of an asset where market disruptive events could occur in which I cannot anticipate (barring unexpected events like technical glitches, force majeure etc). I would consider it unacceptable if all the orders for MSFT were reset during intraday trading on the NASDAQ.
Fractionally callable assets doesn’t increase the difficulty of pricing - it makes it basically impossible. I know assets in Counterparty aren’t a good fit for bonds but let’s take bondsas a concrete example for now. A callable bond may be called if the prevailing interest rates for which I could access funding is close to or lower than the coupon payments on my bond obligations. In this scenerio, a buyer of my bond would discount or put a premium on the price of the callable bond factoring the coupon rate and the forward curve of the interest rate for the underlying currency.
If a bond was fractionally callable, I just wouldn’t be able to know if or when the issuer may want to restructure part of their funding. This uncertainty would mean I wouldn’t be purchasing any assets that are fractionally callable that wasn’t discounted to the full value of the asset being callable.
So whilst technically speaking it would be fine to leave fractionally callable assets, I would suggest a market for partially callable would converge to the price of that an asset being fully callable.