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It's been an exciting four years for Bybit. Since our launch in 2018, the Crypto Ark has achieved many milestones and accomplishments along its journey to excel as a reliable and safe platform for all traders. This year is no exception as we celebrate our fourth anniversary with several new products and services — notably, ,Bybit Options,.
In today's crypto market, exchanges play an essential role in shaping the landscape of options trading. As industry leaders, they are responsible for driving supply and demand through their market views and trading strategies. This can have a significant impact on the volatility of crypto prices, as well as overall market trends.
On Dec 15, 2022, leading industry experts from derivatives-based platforms such as Deribit, QCP Capital, DWF Labs and others gathered at ,Expand Your Options: Moving Forward Together in Volatile Markets,, to discuss, debate and analyze the potential of the crypto options market.
Watch the YouTube live stream recording below, or read on for a summary of the panel's three sessions.
Session 1: Moving Forward Together in Volatile Markets
Discussion #1: Trading Behaviors in Different Timezones
The first session opened with Hao Yang, Head of Options at Bybit, Simon Nursey, Head of Derivatives at QCP Capital, and Luuk Strijers, Chief Commercial Officer at Deribit exchanging information about their trading behaviors in different time zones.
Hao shared that Bybit Options is mainly focused on retail clients with evenly distributed flows from different time zones but with slightly more volume trading during Asian hours. Meanwhile, Luuk mentioned that Deribit pays most attention to institutions and its volume significantly decreases during weekends due to a lack of retail activity. Interestingly, he added that Deribit is less driven by time zones than its competitors. Finally, Simon explained that QCP Capital is uniquely positioned to observe customer trends from individuals up to crypto foundations and macro funds, leading to the realization that Asia plays a significant role in providing liquidity through options — an effect felt by U.S.-based crypto funds and hedge funds alike.
Discussion #2: Definition of a Good Exchange
Building a derivatives exchange is no simple task, and it requires trust, dedication, and robustness to ensure systems and uptime are maintained. From carefully understanding the difference between perpetual and arbitrage products to ensuring compliance with margining standards, Simon, Luuk, and Hao concurred that creating an options trading platform requires expertise in financial engineering combined with a deep understanding of customer needs.
On Bybit's front, Hao added that the Options team has been working hard to provide value in the crypto ecosystem by educating people on how to use options effectively to generate yield or speculate on trends. By doing so, Bybit hopes to gradually gain customers' trust even during times of extreme volatility.
Discussion #3: The Future Outlook of the Crypto Options Market
Cryptocurrency investors have had a difficult year, with prices dropping significantly in the past 12 months. But despite the bearish sentiment, Simon and Luuk remain optimistic about the future of crypto options trading. They point to QCP's successful launch of its options activity last winter as evidence that there is growth potential. Furthermore, they argue that the market has matured dramatically over the last year and is now much more reliable than before.
The trio agreed that by educating users on how to use options effectively, they can provide valuable yield in a turbulent market. This knowledge has enabled them to gain customers' trust and build reliable platforms despite economic uncertainty.
Closing off the discussion, Hao introduced Bybit's innovative approach to the volatile options market: equipping users with the knowledge required to understand and utilize options safely. Through collaboration with Community Builders, they are educating potential customers on options while also simplifying complex products. Bybit's focus on these two areas promises to provide a secure and user-friendly experience for retail investors as they make their first steps in the complex world of crypto options trading.
Session 2: Two Keynotes: Growth in Crypto Options
The second session of the crypto options seminar kicked off with Hao's insightful keynote on how exchanges can drive crypto options adoption. Coco, Head of Strategy at Forthtech, then followed up in the latter half of the session by delving into important market features and investment values related to crypto options. The information generated by both speakers was extensive, and the collective intelligence presented shed new light on how crypto options work, inspiring ideas on how markets could rise and thrive in support of digital asset trading.
Keynote #1: Road of Growth: How Can We Grow Crypto Options Adoption
Hao began his keynote by underscoring Bybit's commitment to the importance of education. He noted that delivering growth to the options market begins by fostering a better understanding of how options can be used as a strategic tool for big and small investors alike. To that end, Bybit has invested significantly in its technology infrastructure so that it can handle high-volume trades seamlessly.
Additionally, Bybit has established partnerships with community builders to make the options space more accessible and attractive — and thus, further educate everyone on the fundamentals and possibilities of the options market. Together with establishing better infrastructure and introducing innovative products into the market, Hao believes these measures will go a long way towards overcoming the various challenges of effective options trading in the cryptocurrency market.
Keynote #2: Crypto Options: Market Features and Investment Value
Coco's keynote highlighted how the cryptocurrency options market has experienced significant growth since its infancy. She explained that with Bitcoin and Ethereum contracts reaching 600,000 and 5 million respectively, the transactional value came up to a staggering 15 billion USD. Not only this, but the implied volatility of these transactions was high throughout, demonstrating an encouraging rate of growth for the industry. Additionally, Coco pointed out that due to increasing institutional participation there has been a surge in options trading — indicating encouraging signs and healthy progress for the cryptocurrency space moving forward.
Coco's closing remarks on options strategies revealed the potential of minimizing risk and maximizing returns with these methods. Protective put, covered call, and collar strategies are becoming increasingly popular in the digital currency markets thanks to their ability to control volatility and provide investors with better protection against downside risks without having to invest directly in the underlying asset. Furthermore, these strategies help diversify portfolios, reducing the chance of losses due to any market instability. By introducing her audience to different options strategies, Coco demonstrated that even seemingly risky conditions can be managed more effectively.
Session 3: Options vs Perpetual Contracts: Which is More Useful?
The third and final session saw a thrilling intellectual exchange between industry leaders Clément Florentin, CEO of Darley Technologies and Advisor at DWF Labs, Katryna Hanush, Director of Business Development and Partnerships at Wintermute, and Gregoire Magadini, Director of Derivatives at Amberdata. Clément began by discussing the financial implications of uncertainty in the market. Katryna then shared her thoughts on the need for companies to invest in long-term solutions that can adapt to changing market conditions. Gregoire then capped off the conversation by delving into alternative approaches to risk management using derivatives. Each presenter brought a keen insight into their respective area of expertise, resulting in an impassioned debate about how to best address the current economic situation.
The Risk of Options and Perpetual Contracts
Clément asserted that the distinction between options and perpetual lies in their varying risk profiles, with the former providing a maximum loss amount for its users. This can greatly benefit traders looking for advanced ways to manage their exposure. On the other hand, Katryna explained that market makers tend to employ liquid Delta one products when trading options; though these may be difficult to locate in less established markets. Both experts highlighted how knowledge of the scene is necessary if one is to make informed investments in crypto. Ultimately, it is through understanding which strategies are most appropriate for one's situation that investors can achieve successful outcomes in this dynamic space.
When to Choose Between Perpetual and Options
Clément and Katryna's discussion provided valuable insight into the differences between perpetual and options, as well as options versus purpose-built investments. Investors can gain exposure to market movements by utilizing perpetual or options; however, with options, traders have more freedom. Additionally, while options provide greater flexibility than purpose-built investments, there is still an inherent level of risk involved in both types of investments. While perpetual does not include a time dimension, options offer the delta exposure up or down with maturity within a given timeframe. This can be beneficial for those looking for more control and detailed strategies in their investments.
Closing Remarks
In their final words, Clément, Greg, Katryna, and Hao expressed that crypto options offer investors a unique opportunity to manage their risk while also enjoying potential gains. As Clément attested, one can use options as an insurance product to safeguard against market crashes. Furthermore, Greg revealed the emotional and technical commitment required by traders — passion and knowledge are essential for success in this space. It is not only important to understand the basics of trading, but also to educate oneself about cryptocurrencies beyond the price movements. Finally, Katryna and Hao concluded that making informed decisions about investments require knowledge of the industry and market conditions. By equipping themselves with pertinent information, investors will be on track to make successful trades in this evolving crypto space.
Thank you again to everyone who tuned in and participated in Expand Your Options: Moving Forward Together in Volatile Markets with Hao Yang. We hope that you found the journey insightful and took away many helpful takeaways.
Be sure to follow us on Twitter (@,Bybit_Official,) for more updates, and follow Hao Yang (@,Haoskionchain,) for the latest news on Bybit Options. Thank you for your continued support!
Source: Bybit Blog
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