Bitcoin Options Market in Asia (Synthetic Mining?)

johnarb

johnarb

I wish this was possible in the US, but TD Ameritrade or Robinhood don't offer this kind of options market, yet.

I would sell bitcoin puts or calls and prefer getting paid the premium in bitcoin as well, but only for a contract that is equal to 1 btc or less

Video for reference below, started at the options discussion section

[Didn't understand the "The shot? has been 11 or 12" comment, does anyone know?]


 
TimtheEnchanter said:
What about IB, they trade everywhere...
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The issue is no real options on bitcoin as the underlying. Even when CBOE options were available, it was options on cash-settled futures

If I can deposit and hold real bitcoins on the exchange, it would be easy to sell a covered call, or a naked put

[edit: Deribit won't let me register, but LedgerX seems to be available to US. Perhaps I need to look into this and if the IV's vs realized vol are similar to what's on the OP video

edit again: I think the problem with LedgerX which has been mentioned on ET is the lack of options trading volume and extremely wide spread]
 
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Same Lazy Element said:
That was filmed before the recent "festivities" - option sellers got their asses handed to them.
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The video showed that these Asian players are experienced vol sellers, well capitalized

I'm going to play the put seller myself as selling 10 puts when btc was $50,000, strike price $48,000 , IV 120, premium I received was $7600 for a 50 day expiration

I'm down $32.2K M2M right now, hardly a wipeout, when I've been collecting premiums all year

This btc downtrend from $48-50K has been been well defined, at some point, could have put an FTX perp futures short btc at 10x leverage using the premium received as collateral at let's say when btc was mid $40K as a hedge, and I'll be ahead currently m2m

Anyway, I'm not a trader just a long only buy & hold guy and I don't see myself getting crushed by this recent "festivities", I think these experienced Asian vol sellers are doing just fine given the high IV's in the options they've been selling

These are not cheap options, they are overpriced options
 
johnarb said:
The video showed that these Asian players are experienced vol sellers, well capitalized
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Video was shot in March when every crypto guy was flying high and down side vol was quite cheap. We had fairly large vol spike and options that looked rich at the time in hindsight are actually cheap. That's especially true if they are selling far OTM options (which is how you get these crazy Sharpe ratios). In fact, I suspect that liquidations of leveraged positions such as perpetuals, futures and option accounts were one of the key contributors of the crazy moves we saw.

johnarb said:
Anyway, I'm not a trader just a long only buy & hold guy and I don't see myself getting crushed by this recent "festivities", I think these experienced Asian vol sellers are doing just fine given the high IV's in the options they've been selling
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Most of their "alpha" was due to the rally in spot, similar to the S&P put and VIX sellers. I am slowly getting involved in crypto options and it is crazy interesting, for various reasons, but I would not call crypto volatility "crazy rich" that would warrant indiscriminate selling. I was actually buying some downside when it was cheap, however, now after vol gotten bid up to ~100% it makes sense to sell.
 
Same Lazy Element said:
Video was shot in March when every crypto guy was flying high and down side vol was quite cheap. We had fairly large vol spike and options that looked rich at the time in hindsight are actually cheap. That's especially true if they are selling far OTM options.
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Did you watch the video?

Please review on 29 min mark about the stated IV's and consider the runup they were referring to where IV went to 250

Around 31 min mark, 30-40 delta

edit: I don't know if I'm using that options calculator correctly. I have not traded options for over 10 years, just found it on a google search

upload_2021-6-4_16-17-45.png
 
Crypto options on deribit have had a wide range of IV levels over the course of recent crypto bull / bear runs. Aa far as crypto implied vo is concerned I personally think 70~80% is never a rich figure as it very often soars up above 100 even by very fleeting issues such as elon's twitter remarks. Taking a much shorter (~3 days) put short only when the opportunity rose has always been a better successful strategies for me...
 
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