1/6 Market Overview — January

Last month's market saw significant developments, starting with the monumental success of the BlackRock iShares Bitcoin ETF, which surpassed $2 billion in assets. This landmark achievement signals growing investor interest in crypto-based ETFs. 2/6 Following the ETF announcement, the crypto market experienced volatility compression. Both BTC and ETH implied vol moved sharply downward.

⏰ Less than 24 hours to go on the @Avax🔺perpetual options trading contest!

Markets crashing with bearish sentiment — let's dive into some analysis of how the top traders used puts to go short and straddles to collect juicy streamia (streaming premia) fees in the trading arena! Trader 0x376f has a huge lead on all $AVAX traders, currently sitting in first place with +57.34% PnL. Looks like 0x376f tested out a 0.3 AVAX put (left) that lost $0.44 in streamia before doubling down on a 7 AVAX contract (right)!

🔗 beta.panoptic.xyz/?view_as=0x376…

1/5 Do you know which position offers the highest leverage?

1. Sold call
2. Sold put
3. Sold put and call

Challenge your options trading knowledge! 🧵👇

panoptic.xyz/research/panop… 2/5 💡 Leverage Demystified: Leverage in trading is about using less capital to control more value. It's a potent tool in the trader's arsenal, but knowing how to wield it makes all the difference.

We are excited to announce that Epoch 5's Trading Competition will launch on @Optimism and @tBTC_project on Thursday, January 25!

• Open to all
• Trade perpetual options on $OP and $tBTC
• $2,000 prize pool

Here's the details of our #TradingCompetition in a nutshell 👇 We are partnering with @TheTNetwork to bring Bitcoin options to Base. Get rewarded for trading $tBTC options over the next 2 weeks!

Full details here ⤵️
panoptic.xyz/blog/panoptic-…

🎁 Sending some merch to the winners of our community quest. Congratulations to Mentalist_Burner, RobeelZahid, and NBA2022!

Who's excited for the next quest? 🥳 Missed our latest quest? Don't worry, you can still participate in our trading contests on @Base and @Avax! Over $11,000 in prizes!

https://twitter.com/1504185345860022274/status/1726616770755367304

1/16 Did you know the "Father of Options" circumvented 19th century usury laws w/financial engineering to make $?

Let's dive into the fascinating story of how Russell Sage leveraged put-call parity to become a millionaire, and how put-call-LP parity revolutionizes DeFi options🧵 2/16 In this thread we'll:

• Show how Russell Sage made millions by subverting the law with options
• Use monkeys & bananas to explain put-call parity
• Explain why "put-call-LP parity" for DeFi options is as groundbreaking as put-call parity was for TradFi options

1/11 HODL vs. LP vs. Calls — which one's best?

⬇️❗HODL downside is substantial (can go to 0)
🧢 LP upside is capped on Uni V3 — token goes up, you now hold the other token
🚫🧢 Call options have unlimited upside, capped downside — but pay premia

Incoming backtest 🧵👇 2/11 Let's backtest *hypothetical* DeFi call options (wen Panoptic? 😉)

🗓️ Jun '21 - Feb '23
⚖️ Periodic rebalancing (day, week, or month)

Strategy:
1. Buy at-the-money (ATM) call option
2. Exercise/close at end of period
3. Pay LP fees as premia

docs.panoptic.xyz/docs/panoptic-…

1/13 📈 Want to understand the potential risk/reward of options trading?

Look no further than the Greeks!

We'll break down Delta, Gamma, Theta, Vega, & Rho and explain how they can help you make more informed decisions when trading Panoptions 😉 2/13 The Greeks are a set of risk measures used in options trading to help investors understand the potential risks and rewards associated with their positions.

Continuing our #ResearchBites series on the Greeks, we'll discuss:

• Delta (Δ)
• Gamma (Γ)
• Theta (Θ)
• Vega (ν)

https://twitter.com/Panoptic_xyz/status/1620829599402971136

1/25 DeFi Options Trading Is Powerful!

There can be unlimited upside…😈
But also unlimited downside 😣

Every trader should know how to create these 18 options strategies in @Panoptic_xyz for any crypto asset, any strike, any size:

❤️ & rt 👇 2/25 In this thread we'll cover:

1. ⤵️
2. 📞
3. 🤸🏽‍♂️
4. 🙅‍♀️😵
5. 💎🦎
6. 🦖
7. 🥌🦋
8. 📞🧈
9. 🦸‍♂️🐂
10. ⤵️🧈
11. 🦸‍♂️🐻
12. 🥌🦅
13. 📅🧈
14. ↗️🧈
15. ⚖️🧈
16. 🦇
17. 🦓
18. 🦓🦓🦓

1/13 Why are some pools good 🐶 and other pools bad 😈?

The answer comes from breaking down LP profits into:
1. Price changes 📈
2. Fees collected 🎟️

By comparing LPs to options, we discover parallel insights — let's explore! 🧵 2/13 Price changes
⬆️ Price up: positive return
⬇️ Price down: negative return
⤵️ Payoff determined by delta (Δ) & gamma (Γ) of LP position

Why use options terminology (Δ & Γ) for LPs?
Hint: that payoff looks awfully like a short put option!

1/12 The weekly volume on all NFT trading platforms was $120M last week. This includes BAYC, CryptoPunks, LOOT, Azuki, etc.

But...

$23 billion (yes, with a B) of value was traded on Uni V3 as financial NFTs 📈

Here's 8 reasons why @Panoptic_xyz is bullish on financial NFTs🧵 2/12 First of all: why is Uni V3 a financial NFT platform?

Liquidity in Uni V3 is deployed under a price range, which means LP positions are non-fungible and can't be tracked using ERC20s

Instead, Uniswap issues an ERC721 to track the funds controlled by each LP position

1/11 We simulated LP performance for 21 popular Uni V3 pools (high TVL & volume)

Results were surprising:
📢 LPs can be profitable!

💰 Which pools made the most?
📏 Are narrow or wide ranges better?

Find out 🧵 2/11 Previously, we explored the ETH-USDC 30bps pool.

For this study:
🗓️ Jun 2021 - Jan 2023 (20 months) for most pools
⚖️ Daily rebalancing
📏 Narrow (r = 1.05) & wide (r = 1.75) ranges

Here's how other ETH-stablecoin pools compare👇

https://twitter.com/Panoptic_xyz/status/1621252130815483904

1/13 How do you know if one LP position or portfolio is riskier than another?

Is LPing riskier than HODLing?

This is the first of a series of threads where we discuss different types of risk, how to interpret them, and how to hedge them.

Let's dive in! 2/13 Risk measures (RMs) are crucial in assessing the stability and performance of a portfolio, and they can be used to guide investment decisions.

When providing liquidity on Uni V3, there are several key risks to consider such as volatility, market risk, etc.

1/12 We analyzed simulated LP performance on ETH-USDC 0.3% pool.

Results were surprising:
📢 The optimal width was wider than expected.

• What's the optimal width for max returns?
• How does that change for 🐂 vs 🐻 markets?

Find out 👇 2/12 The strategy is simple:

💦 LP around the current ETH price with ±X% width
⚖️ Rebalance your LP position after a day, week, or month (you pick)
💵 Collect & compound your fees!

1/12 In this series, we will look at different (financial) Greeks.

Most know about alpha, but what about beta? How can we compute it? How can we use it to hedge our investments?

Let's discuss! 🧵👇 2/12 First things first:

Beta (β) measures the risk of an asset or portfolio, S, against the risk of a reference market index, M.

See the mathematical definition below👇🤓

β(S; M)= correlation(S; M) x volatility(S) / volatility(M)