5 min readFutures & options
Coin-settled vs tether-settled crypto options
Deribit by Coinbase and OKX price and pay bitcoin options in bitcoin, Bybit in tether (USDT). How they differ, and why the site compares them in volatility.
Blog
Dated futures, option chains, implied volatility and max pain: how they work, and how to read them across exchanges.
5 min readFutures & options
Crypto options arbitrage: when one bid beats another's ask
When one exchange bids more for an option than another asks, buy on one, sell on the other and keep the gap. When it pays after fees, and how to check.
5 min readFutures & options
The futures spread trade: one expiry, two exchanges
Short the dated future dearest over its index, long the cheapest on the same expiry: the gap is locked in at expiry, less fees. How the site works it out.
5 min readFutures & options
Vega explained: what a volatility point is worth
Vega is what a point of implied volatility is worth on an option. Why it peaks at the money, grows with time, and turns a gap in volatility into dollars.
5 min readFutures & options
What an options market order really costs
A market order on an option takes the best price, then the next, until it's filled. Why options make that cost more, and how to see where it costs least.
4 min readFutures & optionsPerpetuals
Crypto futures premium: dated futures vs perpetual funding
A dated future trades above or below its coin's index until it expires. How to read its premium as a rate a year, why it's mostly above zero, and how it compares with funding.
4 min readFutures & options
How to read a crypto option chain across exchanges
An option chain lists every strike for one expiry, with each exchange's bid and ask. How to read calls and puts, the best price, crossed quotes and the forward.
5 min readFutures & options
Implied volatility explained: compare crypto options fairly
Implied volatility is an option's price written as the yearly move it implies. Why it's the fair way to compare crypto options across exchanges, and how to read it.
3 min readFutures & options
Max pain in crypto options: what it is and what it isn't
Max pain is the price at which an expiry's options would pay their holders least. How it's worked out from open interest, and why it's no forecast of where the price goes.
3 min readFutures & options
The volatility smile: why crypto options' wings cost more
Implied volatility isn't the same at every strike. Why crypto options far from the money carry higher volatility, what the skew says, and how to read the smile.