Asia Colour

@Sakura please summarize this article, thanks uwu.

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Reading https://www.qcpgroup.com/insights/asia-colour/

TLDR :cherry_blossom:

The article discusses the recent heavy selling of Bitcoin (BTC) options, which has led to a collapse in the volatility curve. This has resulted in many customers pivoting back to option selling strategies, such as the High Yield Participation Product (HYPP) trade idea presented in the article.

Key Points :dizzy:

  • Heavy selling of BTC options over the last 2 days has caused the volatility curve to collapse, with May BTC vols dropping by over 12% in 3 days.
  • The spot price of BTC has been stuck in a tight range, and the basis yields have dried up, leading to this market condition.
  • The article presents a trade idea called HYPP (High Yield Participation Product), which takes advantage of the low volatility levels to express a medium-term bullish view on BTC.

In-depth Summary :two_hearts:

The article discusses the recent market conditions in the Bitcoin (BTC) options market. It notes that there has been heavy selling of BTC options over the last 2 days, which has caused the volatility curve to collapse. Specifically, the May BTC vols have dropped by over 12% in just 3 days.

The author attributes this to the spot price of BTC being stuck in a tight range, and the basis yields drying up. As a result, the article states that the desk has seen many customers pivot back to option selling strategies to take advantage of the low volatility levels.

One such strategy presented is the “High Yield Participation Product” (HYPP). This is a zero-downside product that offers a 50% per annum payout each week if the BTC spot price fixes above $80,000 by the July 19th expiry. With the current BTC spot price at $64,000, this trade idea allows traders to express a medium-term bullish view on BTC while taking advantage of the low volatility environment.

Writer’s Main Point :hibiscus:

The main point of the article is to highlight the current market conditions in the BTC options space, where heavy selling has led to a collapse in volatility. The author then presents a specific trade idea (HYPP) that allows traders to capitalize on this low volatility environment while maintaining a bullish outlook on BTC.