I'm thrilled to announce what I believe is the first-ever #SPX6900 corporate treasury.
Over the past three weeks, a company I’m a shareholder in has begun building a sizable position in $SPX - both via spot and OTC call options (the first ever executed on SPX6900 - more on that below).
I’m now excited to open-source the materials, processes and insights, in case other aeons want to help drive institutional and corporate adoption too.
Over the past three weeks, a company I’m a shareholder in has begun building a sizable position in $SPX - both via spot and OTC call options (the first ever executed on SPX6900 - more on that below).
I’m now excited to open-source the materials, processes and insights, in case other aeons want to help drive institutional and corporate adoption too.
A few weeks ago, a company I’m close to - one with a meaningful crypto treasury and a long-term outlook - began considering an allocation to $SPX.
Since I was the one who introduced them to @MustStopMurad’s thesis, they asked me to help design a plan for how this could take shape.
Since I was the one who introduced them to @MustStopMurad’s thesis, they asked me to help design a plan for how this could take shape.
https://x.com/AeonReborn/status/1930042646367474153
@MustStopMurad We had to work within a few constraints:
a) per their mandate, the treasury had limited room for crypto assets outside of BTC and ETH
b) they wanted exposure with the option to acquire more tokens beyond just spot purchases
a) per their mandate, the treasury had limited room for crypto assets outside of BTC and ETH
b) they wanted exposure with the option to acquire more tokens beyond just spot purchases
After some consideration, we decided to allocate the available room entirely to spot accumulation, and to explore purchasing additional OTC call options - custom-structured for us - on SPX6900.
The final plan was distilled into a memo, which you’ll find below. It was essentially my pitch for SPX and this specific deal.
Feel free to fork it, edit it, and repurpose it for your own use.
docs.google.com/document/d/1PN…
The final plan was distilled into a memo, which you’ll find below. It was essentially my pitch for SPX and this specific deal.
Feel free to fork it, edit it, and repurpose it for your own use.
docs.google.com/document/d/1PN…
Creating OTC calls on $SPX - what I believe are the first ever - was in and of itself a fun and insightful experience.
We spoke with four major crypto derivative desks, and the conversations made it clear how early we are - and how big the opportunity ahead is. Two of the four initially thought I was asking for options on the S&P 500 (!), and the other two quoted volatility in wildly different ways.
This makes me believe that 99.99% of crypto (even pros) haven’t realized what’s brewing here and this is our opportunity.
We spoke with four major crypto derivative desks, and the conversations made it clear how early we are - and how big the opportunity ahead is. Two of the four initially thought I was asking for options on the S&P 500 (!), and the other two quoted volatility in wildly different ways.
This makes me believe that 99.99% of crypto (even pros) haven’t realized what’s brewing here and this is our opportunity.
As you'll find in the memo, we ultimately settled on a highly reputable desk that priced volatility around 200.
While that’s an extremely high number by any traditional measure, we believe it’s 1 to 2 orders of magnitude lower than what we might see over the next 6–12 months, making this a positive EV bet.
While that’s an extremely high number by any traditional measure, we believe it’s 1 to 2 orders of magnitude lower than what we might see over the next 6–12 months, making this a positive EV bet.
As you aeons are surely interested in the long-term success of the community, it is key to realize that buying options is extremely constructive for the token.
The desk will hedge our calls by buying in the open market and will progressively buy more and more as the price rises (more delta to hedge).
Also, the options are token settled, so it will ultimately result in real buying pressure.
The desk will hedge our calls by buying in the open market and will progressively buy more and more as the price rises (more delta to hedge).
Also, the options are token settled, so it will ultimately result in real buying pressure.
@MustStopMurad The company purchased blocks with strike $10 for the expiry dates of DEC25 and MAY26.
There were multiple considerations that went into selection of these contracts. Some are presented in the memo, but feel free to ask me in DMs if you want to go deeper.
There were multiple considerations that went into selection of these contracts. Some are presented in the memo, but feel free to ask me in DMs if you want to go deeper.
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