Flash Update – October 18th, 2021

Published on: October 18th, 2021

The Last Hurrah… I just want to get out a quick trade recommendation because I’ve discovered a great opportunity! As you know, I think we are in the beginning of the next exponential up-leg in crypto and my focus is on ETH.

Comments

  • WM
    William M.
    18 October 2021 @ 16:08
    Derebit is banned in the US
    • RP
      Raoul P. | Founder
      18 October 2021 @ 16:27
      Ledger X then...lower strike or earlier expiry.
  • MS
    Michael S.
    18 October 2021 @ 16:51
    Thanks Raoul.... To anyone here that knows how to get this setup with Ledger X, Please leave a link(s) for newbies like me to get in on this trade... Thanks in Advance!!! Go luck all!
    • AS
      Aaron S.
      18 October 2021 @ 17:00
      I'd get working on it fast. There is some KYC and normal setup procedures - but I got through it all in about 30 minutes. Heads up that, unless I'm missing something, the contracts Raoul mentioned (10k in December) are about 200 bucks now.
  • BD
    Brad D.
    18 October 2021 @ 17:10
    I historically buy the coins and do not trade/use options with respect to crypto assets. Do the option contract work the same as equity such as 1 contract=100 shares (or ETH in this case or is it 10?)
    • MD
      Mike D.
      19 October 2021 @ 17:54
      Varies according to which exchange you use. The multiplier is 10 on Ledgerx for ETH, and is 100 for btc.
  • JH
    J H.
    18 October 2021 @ 17:22
    Can vouch on LedgerX, been a client since mid last year on the BTC side of things. They added ETH options in the first half of this year. Exchange was bought by FTX in recent months. Raoul points this out, but given that Derebit has the most volume (by a wide stretch!) in the options space, you’re going to see fairly wide bid/ask spreads and just a much lower number of transactions on LedgerX.
  • JA
    John A.
    18 October 2021 @ 17:30
    Sorry, I live in New York and therefore I need to be protected from a potential 26x upside by my regulators. But I can totally bet on the Thursday Night Football game. Apparently, this is gambling though lol. It's too late for this cycle, but I'm going to need to log into the legalities of being a US citizen living in NYC and using VPN's and offshore bank accounts JUST so I can get equal access to the financial markets. The IV is already up on Ledger X. Folks can take a look if they want, but it's a lot less attractive for a person like me who subscribes to the Monte Carlo style of options trading. Too bad, I like the thesis.
    • OM
      Oliver M.
      19 October 2021 @ 16:08
      I appreciate Raoul posting the trade but LedgerX just plain sucks in the pricing and strike price selection. I thought it would be big for FTX but not until they do some work there. 3:1 leverage is not lotto enough for me. Adding more ETH and ETHE in the Roth IRA has been my plan.
    • RB
      Ryan B.
      19 October 2021 @ 13:24
      I was quite surprised at how low the volume was on LedgerX, especially considering the recent news that FTX had acquired them. I wouldn't bet the farm using LedgerX. Just a very small position for me. I bought a few ETH and BTC options over the past week. You may be better off buying BTC options on LedgerX as it is more liquid than ETH options, but still pretty illiquid. If the adoption rate of LedgerX takes off exponentially in the next few months, I may consider adding more as liquidity improves.
    • js
      james s.
      18 October 2021 @ 22:52
      overall good news for ETH, but maybe not for this specific trade. will observe and wait for a better time to jump in
    • RP
      Raoul P. | Founder
      18 October 2021 @ 17:50
      Yeah, it is. I did a small amount of the $10k in Dec but its a punt.
    • AS
      Aaron S.
      18 October 2021 @ 17:40
      Yea I'm out on this one too. I set everything up but the premiums look pretty nasty atm. Think you're probably looking at 5-10x unless I'm doing the math wrong. and 6 weeks till expiration for 10k strike is aggressive for those premiums.
  • FK
    Firoze K.
    18 October 2021 @ 17:36
    Looks like team RV has moved the market!
  • HC
    Ho C.
    18 October 2021 @ 17:49
    Can we buy call options of $GLXY instead? Their balance sheet is basically mostly ETH.
    • RP
      Raoul P. | Founder
      18 October 2021 @ 23:23
      Issue is whether BTC ETF takes funds away from these crypto equities.
    • CF
      Christopher F.
      18 October 2021 @ 21:48
      Was thinking the same thing.. frustrated US investor here
  • MD
    Mario D.
    18 October 2021 @ 18:32
    Thank you for sharing this one. I was really keen to hear how to do this in detail. I am in. Fingers crossed. M
  • SW
    Steve W.
    18 October 2021 @ 18:55
    Be careful if trading on LedgerX.... currently asking around 1K for the 2022 March 10K CALL. This is a mini contract.... 1/10 ETH... so you would be paying 10K for the right to buy ETH at 10K? Doesn't seem that great a risk/reward unless I'm missing something.
    • SW
      Steve W.
      18 October 2021 @ 21:00
      You're right Steve B.... sorry for any confusion.... quotes are per 1 ETH and not per 1 contract.... needed to look further on the site.... *Note: Option premiums on LedgerX are quoted in terms of 1 BTC/ETH, meaning you can trade a fraction of the option premium listed on the options chain.
    • SW
      Steve W.
      18 October 2021 @ 20:26
      I'm going off of this info from LedgerX site: LedgerX offers Bitcoin mini options, swaps and futures; and Ethereum Deci options and swaps. Trading Options on LedgerX 1 Mini contract = 1/100 BTC or 0.01 BTC | 1 Deci contract = 1/10 ETH or 0.1 ETH How much BTC does 1 mini options contract represent? 1 mini contract = 0.01 BTC, 100 contracts = 1 BTC How much ETH does 1 deci options contract represent? 1 deci contract = 0.1 ETH, 10 contracts = 1 ETH I do believe quotes are per contract.
    • SB
      Stephen B.
      18 October 2021 @ 19:56
      1k in premium is the price for 1 eth at 10k strike. at least i believe im reading that right. its basically $99 for .1 eth
  • PK
    Peter K.
    18 October 2021 @ 20:09
    want to give this try but having issues with deribit set up
  • MA
    Muhammad A.
    18 October 2021 @ 21:13
    All, I am in Ontario, Canada, can't use Deribit or Ledger X, any other options? I have been looking since the past few weeks but I can't find anything. Hopefully someone can help!
    • MA
      Muhammad A.
      19 October 2021 @ 03:54
      Yeah unfortunately, only Ontario is subject to the restriction, its US wide and just Ontario Canada.. so frustrating. I have been trying to find an alternative for so long.
    • sp
      stephen p.
      19 October 2021 @ 03:02
      I'm in Alberta and was able to create a deribit account & entered a position on Saturday after watching the monthly update video. the KYC process took about an hour to complete. Note that Deribit supports 2-factor authentication & I recommend people use it. Thanks very much Raoul for the trade recommendation: It's fantastic to be able to get this kind of exposure with limited downside. FWIW I think the options are (still) under-priced.
  • OG
    O G.
    18 October 2021 @ 21:33
    Please correct me if something is totally wrong with my calculation: As I write this now, the Mar-21 $15000 Call is 0.05 ETH and the $10000 Call is 0.085. Assuming price of $20000, isn't that $10,000 Call a better deal? x31.38 vs. 26.68? And if the price will be less than $20000 there is still upside? Thanks.
  • js
    james s.
    18 October 2021 @ 22:36
    Big jump from $167 - curious why that might be Bid - 949 Ask - 835 on LedgerX 2022 March 25 - 10,000 ETH Bid - 225 Ask - 430 2021 Dec 31 - 10,000 ETH
    • MD
      Mike D.
      19 October 2021 @ 17:58
      I've been using LedgerX for a while, and that's how it is. High prices and large spreads. Sigh.
    • AA
      ALLEN A.
      19 October 2021 @ 02:23
      confirmed... Ledger X is 995 (right now) 2022 March 25 - 10,000 ETH
  • LH
    Luis H.
    18 October 2021 @ 22:53
    Deribit does not allow cash deposit. You have to transfer Crypto.
    • DD
      Diane D.
      19 October 2021 @ 05:55
      RAUL YOUR MY GOD LOVE TO YOU MY BEAUTIFUL BROTHER :o)
  • SP
    Saxon P.
    18 October 2021 @ 23:29
    New to this type of trade. What's the risk? Is it just your initial investment or can you end up owing them money?
    • SP
      Saxon P.
      19 October 2021 @ 04:43
      Thanks Raoul!
    • RP
      Raoul P. | Founder
      18 October 2021 @ 23:37
      Just your initial investment
  • DD
    Diane D.
    19 October 2021 @ 05:53
    Hi everyone!! Has anyone from Us been able to set up this trade. If so can you share how you did it. Thanks ten million times. I will also do the same. Check back soon. Good luck so excitihgngo ooooo CRYPTO WWWOOOOHHHHOOO
    • MD
      Mike D.
      19 October 2021 @ 17:43
      Simple to use LedgerX .. do you have any specific question?
  • af
    andrew f.
    19 October 2021 @ 07:45
    The other thing to be aware of is that these are traded as European options, so unlike US options there's no early settlement.
    • af
      andrew f.
      19 October 2021 @ 14:44
      You can still sell the option before expiration though
    • MO
      Matthew O.
      19 October 2021 @ 08:29
      Are you able to sell a call option of equal weighting?
  • LO
    Leonard O.
    19 October 2021 @ 08:45
    Premium is USD266 now.... Raoul - if you think ETH goes to 40k max, would you sell a call with a 40k strike? Think that would save you ~USD60 premium on each option based on prevailing market
  • ML
    Michael L.
    19 October 2021 @ 11:31
    Many thanks Raoul, appreciate it, as always! Love the idea, fingers crossed!
    • KH
      Kirsten H.
      21 October 2021 @ 01:59
      It's a steep learning curve, but hopefully I'll get there in time! Thanks Raoul!
    • LO
      Leonard O.
      19 October 2021 @ 13:00
      Great comment! Agreed
    • LO
      Leonard O.
      19 October 2021 @ 13:00
      Great comment! Agreed
  • JR
    John R.
    19 October 2021 @ 14:48
    Raoul, Thank you for another great idea. Unfortunately US. Does anyone know if you can "margin, leverage" your Coinbase account?
  • af
    andrew f.
    19 October 2021 @ 14:53
    Thanks for the info on Deribet, Raoul. Easy to set up (non US) within ten minutes and fund. Trade done. Should be fun.
    • af
      andrew f.
      22 October 2021 @ 17:32
      I think that if you fund it with BTC then you are restricted to BTC contracts. Better to convert BTC to ETH on your crypto platform before transferring. I know that this is not Raoul's trade, but it is unfathomable to me that ETH will go up without BTC rising too, so a 200,000 March 22 BTC call option may also work very well if you can't convert to ETH, but you may not get the same upside.
    • GA
      Greg A.
      20 October 2021 @ 22:02
      Hi Andrew. I was wondering if you could lend me a hand? I'm an outsider to this type of trading. I managed to set up a Deribet account and fund it using BTC. My question is do I have to transfer my BTC to ETH in order to complete this trade? I keep trying to do it but the message reads ERROR not enough funds in the account.
  • RG
    Razmig G.
    19 October 2021 @ 15:27
    Hi, Can anyone breakdown the math. Newbie to options here. I get the idea. But I can't figure out the math. Much appreciated.
    • RG
      Razmig G.
      19 October 2021 @ 15:28
      *Will be executing in ledger as I reside in the US.
  • OM
    Oliver M.
    19 October 2021 @ 16:03
    LedgerX is pretty terrible to be honest. ETH longer dated calls pricing about 3x of what Derbit charges. So I'm only seeing about 3-4x leverage on the $10,000 strike which is their highest in March for example. Oh well. I'll just load up on the actual ETH. Just fyi. I appreciate the flash update.
  • JS
    Jim S.
    19 October 2021 @ 16:21
    You could also try full Defi with Opyn.co for US based investors - liquidity is pretty thin though and only dated to Dec 21
  • MD
    Mike D.
    19 October 2021 @ 17:48
    @Raoul, would you please correct me on something? You mention Dec 31 ETH 10000 calls for $66 on LedgerX. I've been watching LedgerX carefully for weeks, and that call has never been under $225. At the moment it's a 375/450 spread. Are you looking at something different than I'm seeing? Thank you.
    • RB
      Ryan B.
      19 October 2021 @ 21:58
      On LedgerX, the quoted premium price buys you 10 contracts (each worth 0.1 ETH) and the right to purchase 1 ETH at the strike price. What does the quoted Deribit premium buy you? Does it buy you the right to purchase 1 ETH? 0.2 ETH? Other? If Dec 31 2021 10000 ETH Call on LedgerX currently costs $450 per ETH and on Deribit cost $86 per ETH, it is obviously not a good buy on LedgerX. So, I'm wondering if the quoted $86 premium on Deribit is for a fraction of an ETH, such as 0.2 ETH and therefore equivalent to $430 for 1 ETH, which would be on par with LedgerX.
    • CM
      Charl M.
      19 October 2021 @ 21:39
      ETH-31Dec21-10000 calls are now $86 to $92 on Deribit
    • RP
      Raoul P. | Founder
      19 October 2021 @ 19:51
      Dec 31st 2020 $10k calls
    • RP
      Raoul P. | Founder
      19 October 2021 @ 19:51
      Im not sure if the multiplier is different but I use Deribit and paid from $66 to $88 on monday.
  • YL
    Yves L.
    19 October 2021 @ 18:51
    Hello, does anybody know if Deribit calls are European or American? Will I be able to sell before the strike date on Deribit if need be? Thanks!
    • AA
      ANDRE A.
      25 November 2021 @ 05:55
      They are European https://www.deribit.com/kb/options
    • RP
      Raoul P. | Founder
      19 October 2021 @ 19:50
      European options or American options allow you to sell before expiry, the difference is whether you can early exercise into the underlying but I imagine we will either sell out or run through to expiry, depending on the market but most likely sell out
  • HS
    Hamish S.
    19 October 2021 @ 20:11
    Depending on conviction, even a CFD with 25% margin will get you 40+x from here.
  • RS
    Rodrigo S.
    20 October 2021 @ 03:01
    The price close to the 15k suggested, it seems to me almost certain that in "some month on the way" it will have to double in price... Therefore, it seems to me that it makes more sense and better risk/return: Buy a strike 100% above the spot every month (30 days maturity) one fifth of the value, than a 160 day maturity...
  • KH
    Kirsten H.
    20 October 2021 @ 04:00
    So keen to participate, I've managed to set up my Deribit account but this is way beyond my level of experience. It's embarrassing but I don't know how to go through with the process of buying the options... anyone have any suggestions! Any guidance would be very welcome!!!
    • KH
      Kirsten H.
      20 October 2021 @ 21:18
      Thanks very much everyone, I'll spend some time looking at the Deribit videos and other material.
    • EC
      Edward C.
      20 October 2021 @ 18:17
      Hi Kirsten, on Deribit, each contract has only 1 ETH as the underlying asset. So if you go to ETH options and find the March 2022 expiry, you can expand out all the strikes. For each strike, it will show the first bid/ask and the size. The market have moved since Raoul's note, but the current offer for the march 2022 15k call is 0.0785 ETH for 120 contracts. So if you buy 1 contract, it costs 0.0785 ETH. If ETH expiry price is circa 40 k in March, your payoff in ETH is (40,000 - 15,000)/40,000. i.e. (final px - strike px)/final px. i.e. for each 0.0785 ETH in premium you paid for each contract, you'd receive 0.625 ETH. (SO a significant return in USD terms). In deribit, you could double click on the option to bring up the order screen to trade. In saying all that, the investment could go to zero, so be prepared to lose your premium. Hope this helps,...if not clear, let me know. Can also refer to below https://legacy.deribit.com/pages/docs/options
    • SP
      Saxon P.
      20 October 2021 @ 11:57
      Deribit also has help pages that explains alot
    • SP
      Saxon P.
      20 October 2021 @ 04:38
      I managed to buy a small amount as a test before I get more comfortable. But I need to do some more research on managing the risk, margins etc, what moves I can make and when. There are Deribit videos on YouTube. That seems like a good place to start getting your head around it and that's my next step.
  • AH
    Al H.
    20 October 2021 @ 12:17
    Kirsten H. I don't see why this should have to be embarrassing for us to be able to ask for help. Lots of people in the RV community do not come from Finance or Tech backgrounds and we are here to learn. I joined RV 2 years ago and had very little if any knowledge of the financial/crypto world. All I can say is that the membership in an of itself and what I have learnt so far from this community has been my best investment to date. I am struggling to understand how to put this trade on as well . I have been watching lots of youtube videos over the last 24hrs. My Deribit account is set up and ready to go but as a newbie it is really confusing. If there is anyone here that can help give people like me and Kirsten some guidance that would be amazing. TIA
    • KH
      Kirsten H.
      21 October 2021 @ 01:29
      Mohammed, the Youtube Deribit videos are very helpful. All the best!
    • MD
      Mike D.
      20 October 2021 @ 14:21
      Kirsten, Mohammed: I'm in the US and therefore cannot see Deribit quotes easily, but let me try to explain my experience with LedgerX in case it can be useful to you. It should be made clear either on the quotes page or in the support section as to what the multiplier is. For example, on LedgerX the multiplier is prominently documented as 0.1 for ETH. This means that if I specify that I want to buy 1 call option for ETH, I would be getting the right but not the obligation to buy 0.1 ETH at 0.1 of the strike price. At this moment, LedgerX quotes March 25, 2022 ETH with a strike of $10,000 at a price of $1189. If I put in an order for 1 call, I would be buying the right but not the obligation to buy 0.1 ETH on March 25, 2022 for $1,000 (which is the strike times the multiplier). For this right I would pay $118.90, which is the option price times the multiplier. These are European style options, meaning that I cannot exercise the option until the expiry date. I can, however, sell my option to someone else at any time. I hope this helps!
  • YL
    Yves L.
    20 October 2021 @ 12:52
    What is the minimum numbers of call options i can trade on Deribit please?
  • DM
    David M.
    20 October 2021 @ 13:10
    I just started watching ETH options after reading the report. It seems 20000 strike offers the most implied leverage (3ish times). However, 10000, 12000, and 15000 strike all offer around 2.8 times implied leverage. I may diversify a bit of my lottery ticket.
  • AP
    Alex P.
    20 October 2021 @ 13:28
    This is the call Raoul is suggesting to buy and that is also the price that is increasing with the price of ETH. By clicking on advance Order you are also able to set a limit price, lower would be great, possibly $170 as Raoul suggested. you are able to see the volume, and to be honest is quite low for this $15000 so not many are betting on this, atm it is probably overvalued. https://pasteboard.co/8hgZ5cm6G6ka.png If I understood correctly, every unit equal 0.066ETH so more unit you are buying, higher the stake becomes. See at the bottom right the increase in price for this call. https://pasteboard.co/sThfyN0EUykj.png in this case as we are buying a call we are only going to loose the Premium, if we were going to sell, the lost cold have been infinite. I think this is how it works. Correct me if I am wrong or missed something. ;)
  • VD
    Vishal D.
    21 October 2021 @ 00:30
    Any one buy on LedgerX - I tried it say " insufficient collateral - even for buying calls? Help appreciated
  • AH
    Anders H.
    21 October 2021 @ 09:53
    Hi all, Would one of you mind helping me with sense-checking my math on profit potential for doing the trade as it stands today? I can't understand how Raoul "only" gets to a 87x @ 40.000 USD on his numbers (the ~28x @ 20.000 USD makes sense), so I am likely missing something: 1 ETH call, 15.000 USD/ETH strike @ a premium of 0.0825 ETH / 379 USD (current prices of Deribit) Settled @ 40.000 USD/ETH: (40.000 - 15.000 / 40.000) = 0.625 ETH => 0.625 - 0.0825 ETH = 0.5425 ETH = 21.700 USD in profit ===> Return: 21.700 USD / 379 USD = 57x Settled @ 20.000 USD/ETH: (20.000 - 15.000 / 40.000) = 0.125 ETH => 0.125 - 0.0825 ETH = 0.0425 ETH = 850 USD in profit ===> Return: 850 USD / 379 USD = 2.25x In any case, I would likely wait for correction to see if possible to pick up options cheaper, even probably less likely. Thanks in advance!
    • CW
      Corey W.
      30 December 2021 @ 09:24
      Hi Anders, I too am wondering how the return ratios are calculated. Specifically, why ETH is converted to USD at time of option purchase to acquire the return ratio? In your example, the premium of 0.0825 ETH was paid for the option, 379 USD on Oct 21st price. Because we pay for the options in ETH, doesn't it make sense to use the ETH to USD conversion value at Settlement instead of ETH to USD conversion value at purchase in our ratio calculations? Using your example of 1 ETH call, 15.000 USD/ETH strike @ a premium of 0.0825 ETH / 379 USD Instead of 379 USD, we would have 1650 USD (.0825 ETH * 20,000 USD) as the Premium Settled @ 20,000 USD/ETH: (20,000 - 15,000 / 20,000) = 0.25 ETH => 0.25 - 0.0825 ETH = 0.1675 ETH = 3,350 USD in profit ===> Return: 3,350 USD / 1650 USD = 2x ===> Return 0.1675 ETH / 0.0825 ETH = 2x
    • AH
      Anders H.
      21 October 2021 @ 10:02
      Correction re. the one settled @ 20.000 USD: Settled @ 20.000 USD/ETH: (20.000 - 15.000 / 20.000) = 0.25 ETH => 0.125 - 0.0825 ETH = 0.1675 ETH = 3.350 USD in profit ===> Return: 3.350 USD / 379 USD = 9x
  • JV
    Jay V.
    21 October 2021 @ 11:44
    https://www.coindesk.com/markets/2021/10/20/options-traders-bet-big-that-ethers-turn-for-an-etf-is-coming-soon/
  • JV
    Jeremy V.
    21 October 2021 @ 19:39
    Price is up to $320 now.... Bullish.
  • YL
    Yves L.
    23 October 2021 @ 11:09
    Can somebody please point me to the source of stats on crypto networks active addresses/wallet holders? In October Insider Talks Raoul mentioned ETH/SOL/LUNA as probably the three largest ones but is there a way to monitor this dynamic? I'd be very interested in comparing say Tezos to Avalanche etc.
  • TM
    Tommy M.
    24 October 2021 @ 12:48
    I’d like to know how implied volatility and delta play a role? The delta we see on LedgerX is <50
  • KK
    K K.
    25 October 2021 @ 18:12
    I just purchased this option trade. Its the first time I bought eth, its the first crypto option contract I purchased. Ive bought this with absolute F*CK-Y0$ money (pardon my French) out of my stock trading profits from last year. Im up 25% on a decent chunk of change from my fossil trades. Now I dumped 25% of my profit in this trade. Its both scary and not. Scariest part was on transactional side. But that's habbits for you. In my brain I've burned the money and im absolutely fine with it. Having this chunk burn on my fiat account would feel less safe tbh.. Its a call option into the future of March 2022 that ill gladly take right now. I feel more relaxed now. Oddly enough. RV sub since 2016, pretty late to crypto,. But hey, better be a late bloomer than a non-boom-nocoiner. im excited about the energy of the crypto space and excited about the future. no matter what you do. Good luck to all! thx RV & Paul.
  • JW
    JW2 W.
    28 October 2021 @ 14:20
    I am in this trade now as well. Better than buying an NFT depicting a pixelated gecko :-) (and I like gecko's)
  • MR
    Michael R.
    3 November 2021 @ 12:37
    i bought 10k dec and 15k mar - options on the 20th and 27th. - prices are much lower (up to 30%). am i missing something or is vol coming off sharply?
    • SP
      Saxon P.
      8 November 2021 @ 13:21
      I. Also in the trade and new to options. I suspect the price is lower because we are not in the money yet and time is running down towards end of Dec/ March. I am treating this trade as a science experiment and working on the hypothesis that once we approach and then get on the right side of the price target we should see some gains.
    • NS
      Nirali S.
      3 November 2021 @ 20:21
      Same here. If the price is going up, why is the option premium/value going down?
  • RR
    Raj R.
    6 November 2021 @ 23:39
    Interesting trade!
  • AA
    ANDRE A.
    25 November 2021 @ 06:32
    @Raoul, why not doing a covered call on the ETH that we carry and at same time buying a call spread? For example, we could sell two calls @ 12,000 for $228 each and buy one call @6,000 for $745 (total cost $289 or 6.7%) - all expiring on March 22. We can sell the additional call because we carry the underling. If ETH reaches 12k or higher by expiration we would increase our return by 74% vs only carrying the underling. We would only be worse off if ETH goes higher than $17,711. Breakeven would be ETH current price + $289. I like the odds.