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Options are important for Crypto

Igor Yuzovitskiy

In this write up, we will focus on non-custodial Ethereum based options.

🚀 Leverage

For every 1% movement up in $ETH, a call option may go up 10%.

🦔 Hedge

Protect your holdings, bet against $ETH with a put option or sell a call for additional income.

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Below is an example showing the power of using call options as leverage, the timescale is 3 hours.

Comparing $ETH vs $ETH 3X Margin vs $ETH Call 2

Comparing $ETH vs $ETH 3X Margin vs $ETH Call 2

⁠

Leverage

The focus is on maximizing your returns

👇 Follow the example below:

In this example we illustrate a $100,000 investment and what it would be worth in the future. We compare holding $ETH or an $ETH call. You can change any of the inputs below.

Change Starting Balance:

0000000

100000

⁠

Starting Balance: $

100000

⁠

Assumption Delta 1% up movement in $ETH = 10% up move in $ETH Call

$ETH Balance Growth ($Dollar)

$ETH Balance Growth ($Dollar)

⁠

$ETH Balance Growth (%Percentage)

$ETH Balance Growth (%Percentage)

⁠

Hedge

The focus is on protecting your portfolio during a downturn but not losing all your exposure.

👇 Follow the example below:

Crypto markets have recently fallen 20-30%. Timing the market is a difficult feat to accomplish, however hedging your positions is imperative for long-term growth. In this example we illustrate an 80% long ETH and 20% short ETH utilizing $ETH Puts. We compare a $100,000 investment (100%) in $ETH and a $80,000 investment (80%) and 20% hedge ($ETH Puts). You can change any of the inputs below.

🔴 The below example has $ETH going down 26% over 10 hours.

Change Starting Balance:

0000000

100000

⁠

Balance (80% $ETH): $

80000

⁠

Balance (20% $ETH Puts): $

20000

⁠

$ETH 100% vs Hedge 80% $ETH & 20% $ETH Puts ($Dollars) 2

$ETH 100% vs Hedge 80% $ETH & 20% $ETH Puts ($Dollars) 2

⁠

$ETH 100% vs Hedge 80%$ETH & 20%$ETH Puts (%Percentage) 2

$ETH 100% vs Hedge 80%$ETH & 20%$ETH Puts (%Percentage) 2

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Conclusion

If you are a stakeholder in the Ethereum ecosystem, you stand to benefit by having access to a derivative such as options to help you either leverage or hedge your positions.

Next steps:

Prototype

Educational forum

Liquidity Mining Program

Smart Contracts

MVP

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