The institution set up a multi-legged strategy in Derive's onchain options market, generating $25 million in volume.As the U.S. election nears, increased betting and hedging tied to the political event, is powering notable increases in trading volumes in the crypto market. The election will have far-reaching consequences for the crypto regulatory space in the world's largest economy.options strategy, betting on a continued move higher in BTC after the Nov. 5 election.
The institution acquired 100 call option contracts with a $70,000 strike price set to expire on Nov. 29 while simultaneously writing or selling 200 contracts of the $80,000 call and 100 contracts of the $50,000 put, both expiring on Nov. 29. The institution deposited eBTC, restaked bitcoin created via EtherFi, as collateral, ensuring it earns passive yields on the same.
The strategy, which looks like a ratio call spread funded by a short put position, will profit most if bitcoin rallies to $80,000 by Nov. 29. The positioning is"This $25 million options trade marks a watershed moment for onchain options trading, and it's one that could have significant implications post-election.
"The trade is a prime example of how onchain options offer scalable, non-correlated yield for any onchain asset," Forster added. Derive is the largest onchain options platform, accounting for 32% of the total DEX options volume of $339 million in the past 24 hours, according to DeFiLlama. The onchain market, however, is still relatively small compared to Deribit and other centralized platforms, which boast a cumulative 24-hour volume of several billion dollars.. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications.