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Dialogue with SignalPlus: In the next 5 years, the trading volume of encrypted options is expected to increase by 10-20 times
Summarized by AI
With the market returning to calm and waiting patiently for the next cycle, options trading has once again attracted the attention of the market.
But options are still a niche market, there are Are there any ways to let the market understand the advantages of options and help options enter the mainstream of the encryption world? BlockBeats chatted with SignalPlus CFO Augustine Fan, and listened to his views on current encryption options, track development, and the future of the industry.
BlockBeats: Please give a brief self-introduction first, How did you get into the crypto space?
Augustine: I am in traditional I have 20 years of experience in the financial field, and my professional fields cover public capital markets, private equity and venture capital. In the early days, I worked as a trader on Wall Street, and before that, I was a CIO (Chief Investment Officer) in a family office. Due to my working background I have a long-term in-depth observation of the macro economy, and I am also keen on allocating different risk assets. These experiences have made me not only pay attention to the performance of the financial market, but also interested in the inextricable "correlation" behind it.
Therefore, when I learned about the concept of blockchain, I was immediately attracted by this "disruptive Technological innovation in financial settlement” is deeply attracted. As I have done more in-depth research in this field, I gradually realized that the potential of this technology is far more than that, far beyond the application of settlement level, such as the decentralized data brought by blockchain technology Storage, the ability to return data ownership to users, and the benefits of tokenizing real assets, artworks, and digital assets on the chain, all may bring huge opportunities to different business fields. I think the entire cryptocurrency ecosystem is still at a fairly early stage, and this is a once-in-a-lifetime opportunity for developers in the industry. The current construction can have a profound positive impact on the entire digital asset field.
BlockBeats: Options are actually very small in the field of encryption, because users in the cryptocurrency industry are more exposed to spot and futures, even with Deribit Retail investors on the CeFi platform rarely use it, and more structured products on the CeFi platform use options, so why use the option track to enter the encryption field?
Augustine: Options are not only A trading strategy is also an efficient risk management method. For investors, options can provide some better and more flexible options in terms of diversifying investment portfolios and managing investment risks.
From the experience of traditional finance, as the market gradually matures, the trading volume of options also increases It will increase accordingly, and even rival the spot trading volume of certain stocks and index products; in addition, the successful experience of platforms such as Robinhood has also proved that options do have the opportunity to become one of the mainstream trading tools for retail investors. Trading to make a profit can even compete with professional investment institutions with larger funds.
We firmly believe that a similar development will occur in the cryptocurrency options market, and over time, investing in crypto The currency group and currency price characteristics will be more suitable for option trading. This industry will eventually grow and expand naturally. Investors will also start to pay attention to cryptocurrency derivatives other than futures contracts. We believe that there is a lot of room for the upward growth of option trading volume .
BlockBeats: What is the difference between SignalPlus and previous option products? From the perspective of retail investors, what are the advantages of using SignalPlus?
Augustine: The Heart of SignalPlus The product SignalPlus Dashboard is currently the most comprehensive option risk management tool on the market. Its functions are comparable to the systems used by first-line investment banks, and our UI/UX design is easier to use than the platforms commonly used by ordinary companies. It is completely based on user habits and demand-oriented.
SignalPlus Trading Dashboard is a powerful one-stop trading tool for professional options users, just The settings can be completed with a few simple clicks. Our goal is to provide reliable tools that allow users to accurately manage their options positions. The functions of Trading Dashboard can fully meet all the needs of professional options traders. At the same time, The design of the function also ensures that novice traders can get started quickly.
The functions provided by Trading Dashboard include visual volatility analysis (volatility visualization), risk parameters Analysis (risk parameterization), profit and loss attribution analysis (PNL attribution) and algorithmic transaction execution order (algorithmic execution), etc., and these functions can be further customized according to user needs; more skilled users can also use our dynamic hedging function ( DDH) all-weather, automated management of volatility exposure and risk coefficients, even if there is not a whole professional team trading 24 hours a day, users can fully manage an options trading account through our product functions; in addition, our platform can be connected to any major Trading venues, no matter where users choose to obtain option liquidity, they can enjoy the same high-quality services and functions on our platform.
How retail investors get started with options
BlockBeats: Compared with spot and futures, options seem to be a more difficult concept. Non-linear returns are not easy to understand. You can use Would you like to talk about your understanding of options in plain language?
Augustine:Buy call Call option is like you want to buy a new toy at a certain price. You can spend a small amount of money to occupy a seat in the queue, so that when it is released at this price, you can wait for the opportunity to buy it. But the choice is still yours, you can buy it or give it up. If the toy becomes popular and popular with all the kids when it comes out, the little money spent initially pays off, and you can buy it cheap and sell it at a high price.
On the other hand, buying a put option (Put option) is like buying a stock for an upcoming ski trip. Buy medical insurance in case of injury. If nothing happens, although you lose your premium, which is the premium (Premium), at least you are still healthy, or your assets have not been lost; it doesn’t matter if the worst happens, You can take comfort in having insurance to help you pay your hospital bills.
Finally, please note that this is not financial advice, the core of options is to put you in control Obtaining greater profit potential under risk does not mean that your chances of making money will be higher, but through the leverage characteristics of options, you can use a small amount of funds to obtain greater risk exposure, which will bring more benefits when the market moves in a favorable direction. For a good return, if the market trend is not as expected, the loss is limited to a small amount of premium spent by investors.
BlockBeats: What do you think are the advantages of option products in the current bear market? Long volatility?
Augustine: Generally speaking , Only three things can happen in the market every day: up, down or sideways. Futures and spot products can cover rising and falling situations, but futures and spot products can't do much in a sideways market, unless a "relative value strategy" or other "market neutral strategy" (Market Neutral) is adopted , but on the other hand, options can provide traders with sufficient freedom to trade and profit in three market trends.
Profit through call and put options in the case of rising and falling markets, the operation is relatively Simple, but the sideways situation is actually the most interesting, and only investors who know how to trade volatility can earn alpha profits in this situation; in addition, compared with futures, investors can build more yuan through options Therefore, familiarity with options products can enrich a trader's application skills like learning another programming language.
BlockBeats: What do you think is the way for retail investors to get started if they use option products? In other words, how do they allocate assets more reasonably?
Augustine: First, because The investment environment is constantly evolving. Investors should always maintain the spirit of self-driven learning and self-education, so as to maintain a leading position in this game.
One of the cores of the SignalPlus platform is to share market investment knowledge and opinions with our users, because We believe that everyone should have the opportunity to participate in and profit from the market, and investors should have access to a full set of analysis and ordering tools at any time so that they can compete on a level playing field.
For example, users can easily execute simple or complex In the past, such a trading strategy may require several traders to spend a lot of time watching the market. Now, using the function of SignalPlus, it can be easily completed with a few clicks on the screen, which greatly reduces the cost of execution , so that traders can focus on investment and strategy research.
In addition, the SignalPlus investor community is also very active, gathering many like-minded investors , no matter what background they come from, our community members are always actively sharing and discussing various market views and investment views, and you are welcome to join SignalPlus' TG, Discord and WeChat groups at any time!
BlockBeats: 2022 is not easy. You have worked in traditional finance before. Do you think traditional finance is still optimistic about cryptocurrencies? Can liquidity come back?
Augustine: in traditional finance Among them, cryptocurrency has always been a controversial topic, especially among high-level skeptics (they think that the current "cryptocurrency" is equivalent to a kind of "tulip mania"). Therefore, a series of recent centralized The institutional thunderstorm incident not only seriously hit market confidence, but also made the voices of those who oppose cryptocurrencies louder and louder, especially after the FTX thunderstorm, FUD news appeared every day.
Whether we want to or not, we all have a responsibility to build products that truly deliver on the promise of Web3 "To win back the trust of the public, the most important thing is to provide a better user experience. Although the future is never predictable, I will not be confused by the ups and downs of investment trends, because human beings are fickle and will easily be distracted by the next popular trend; I firmly believe that "as long as you are willing to build, the results you expect will naturally will come", the world will never lack the capital to pursue good products and good ideas.
So I strongly believe that as long as we focus on building and optimizing the product we will be in a good place state, to welcome the arrival of the next cycle.
The Future Market of Crypto Options
BlockBeats: What height do you expect SignalPlus to achieve? For example, within 5 years, what magnitude does SignalPlus expect users to achieve?
Augustine: SignalPlus aims to be the market leading cryptocurrency options The platform sets an industry benchmark in how encrypted option users analyze, trade and manage option positions. The crypto options market is still in its infancy, so we have not set a specific DAU target, but we still hope that through our efforts, we can promote the development of the options market and make options one of the mainstream trading tools for investors.
BlockBeats: Regarding the options market, what do you think the market size will be in 5 years of?
Augustine:Crypto Options Currently The trading volume of encrypted options is only 1-2% of the futures trading volume. In the traditional stock market, this ratio is almost 1:1. We hope that the trading volume of encrypted options can increase by at least 10-20 times in the next 5 years, whether it is The transaction amount or the share in the derivatives market can increase significantly.
BlockBeats: What other plans does SignalPlus have in the near future?
Augustine: We plan to add more product features, further optimize UI/UX, and access more exchanges. We expect to launch mobile terminals in the second half of this year applications; in addition, SignalPlus will continue to optimize the automated risk management system and market-making robots to ensure that our products can provide a first-class performance experience for all users.
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