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Re: Faster, smashter. (fwd)
From: sinan.eren () immunitysec com
Date: Wed, 10 Dec 2008 17:21:05 -0500 (EST)

In response to both Jericho and Bees;

I wasn't actually proposing a market place for 0days. My point was 
something like; index futures on products that is built on a model where 
0day is a part of the equation (perhaps think of it as vega).

for example, Exchange 2003 could be tied to an index and each index point 
could be assigned a dollar value. Theoretical value will than be 
calculated by a model and the rest will be left to the market forces to 
settle the premium. Hedgers can than take long or short positions 
(depending on how the model is formed) to offset their IT costs and 
possible damages from intrusions and other liabilities. Speculators can 
also take on counter or similar positions depending on their outlook.

Yes, there is an obvious flaw which is the risk-free arbitrage by anybody 
who holds a 0day against Exchange 2003. But I believe this could be 
acceptable as part of the market at its infancy and since all or most 
arbitrage possibilities gets discounted by markets eventually, this model 
will lead to less outstanding 0day in underground/criminal circles, 
perhaps even more secure software eventually ?

SDL versus the free market ? Which is more efficient ?

VP of Vulnerability Arbitrage

On Wed, 10 Dec 2008, BEES INC wrote:

i have postgrad applied finance qualifications and this is not really
practical. You need an open/free market on 0day before you could start
writing futures/options contracts. to my knowledge this doesn't exist,
and is unlikely to exist for a whole bunch of reasons. its more
profitable for exploit writers and cheaper for buyers to keep the
other side in the dark on going rates.

i remember they tried something like this in fresno county with the
sausage and spice prices there. though a little different from
exploits its similar in that its a fairly small and niche market, and
the supply was effectively controlled by a cartel, and pricing
information was dubious at best. needless to say it didn't take off

you would be better off writing insurance and collecting a premiums,
and if something does happen the payout could go to covering costs of
patching and recovery. i'm pretty sure ive read of something like this
being already available.

On Wed, Dec 10, 2008 at 1:19 PM,  <sinan.eren () immunitysec com> wrote:

(moderator: retry from subscribed account)

I have been thinking about a potential futures market model to hedge the risk
of software vulnerabilities. Perhaps a modified Black-Scholes-Merton model that
could be tied into Microsoft's exploitability index to determine the premium on
the future contract ? Hedgers (companies, govermantal institutions, military
etc.) could than purchase these contracts from speculators (these could be us)
to tie their risk into a dollar amount. On the other hand researchers can sell
these contracts if they feel strongly about a software or inversely, buy these
contracts to cash in their 0day when it hits the public domain. We need a fair
market place for 0day (outside of the 2 known players whose model benefits no
one) and I believe futures market model is the way to go. After all if you can
hedge your exposure to weather, why can't you hedge it against 0day ? It is not
as crazy as it sounds ....

I would appreciate ideas to tie the value of a vulnerability to a premium, any
quants who do security as well ?


On Tue, 9 Dec 2008, Dave Aitel wrote:

 Hash: SHA1

 One technique we're doing this week with a client is taking an attack
 tree and marking it up with dollar values. I.E. if you wanted to buy
 an 0day in X component, how much would it cost?

 This then is a simple summation to produce a "how much is it to get
 into the internal network from the internet" which the business can
 use to help them decide yay/nay on the project as a whole depending on
 their own view of the threat and the value of the information they are


 Halvar Flake wrote:
 Hey all,

 It seems that discussions in ITsec are periodic -- the same
 discussions and same arguments come up again and again.

 1. Of course attackers use new vulnerabilities. It is the nature of
 offense. Defense is done "to the maximum of current knowledge".
 Offense, by it's nature, has to expand on the status quo.

 2. How do you simulate an attack with a new vulnerability if you
 don't have one ?

 Well, military folks do wargames all the time without actually
 using up the arsenal they have on the shelves. Network attacks
 should probably be done in a similar manner -- have an umpire, and
 give the attacking team a few "0day cards". With these cards they
 get high-probability code execution for a piece of software of
 their choice.

 The pentest then proceeds like a game, but can be conducted on the
 real network, too.

 But I am repeating myself ...

 Cheers, Halvar _______________________________________________
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