Structured product: Participation in the Bitcoin movements with guaranteed capital preservation or participation in passing set price levels.
The product idea:
The structural product is focused on effective utilization of deposited stable coins in landing (debt) services on Binance Smart Chain, Alpaca Finance, in particular. We offer a short-term renewable strategy for market participants with guaranteed capital preservation and a bitcoin movement rate.
The idea’s core is that most of the funds (around 100%) are being deposited through Venus, Alpaca, etc. To receive a yield there are purchased options for a respective pair and an expected movement direction.
The main factors that may impact the BTC rate in the nearest future:
- US Presidential Administration’s decision to regulate stablecoins and positive comments from the FED’s head
- Possible licensing of cryptocurrency ETFs
- Preparations for Taproot update
- Correlation with stock market: possible correction in US and China can also affect Bitcoin price.
Product maintenance
Minimum funds volume: 50 000 BUSD
Term: starting from 10 days
Execution of orders for options purchase at Maker fee is possible by placing an order through the deltatheta Trading Desk.
There are a few strategies, depending on a chosen movement direction of the BTC price
1. “Growth” rate on BTC/BUSD from the current price (central strike)
Deposit placement of 50 000 BUSD in Venus / Alpacа, the expected income for the period October 7 — October 17 will be: (8.11%/365)*10 =0,2221%
The yield on the deposit for 10 days is 111 BUSD.
CALL option purchase with a central strike (54 000 for BTC) with expiration on October 15. Accordingly, the costs will be:
- 33 BUSD (option purchase price) and 2.5BUSD (trade fee on delta.thetа), thereby, 3 contracts are purchased.
2. “Decline” rate on BTC/BUSD from the current price (central strike)
Deposit placement of 50,000 BUSD in Venus / Alpacа, the expected return for the period October 7 — October 17 will be: (8.11%/365)*10 =0,2221%
The yield on the deposit for 10 days is 111 BUSD.
PUT option purchase with a central strike (54,000 for BTC) with expiration on October 15. Accordingly, selling costs:
- 20 BUSD (option purchase price) and 2.5BUSD (trade fee on delta.thetа), thereby, 4 contracts are purchased.
Profitability and risks
Expected profitability:
In this strategy, losses are limited only by the premium, which is 111 BUSD. Responsibility for the safety of funds and a guarantee of return of funds is on Venus / Alpaca landing protocols.
3. Participation in growth if the movement is higher than 56 000 BUSD.
In strategy, the deposit is saved and CALL options are purchased with a strike of 56 000 BUSD with expiration on October 15. The costs will be: 21 BUSD of the premium paid for the option and a fee of 2.5 BUSD on delta.theta. We use the amount of 111 BUSD received from the deposit in ALPACA to purchase 4 contracts.
Expected profitability:
In this strategy, losses are limited only by the premium, which is 111 BUSD. Responsibility for the safety of funds and a guarantee of capital return is on Venus / Alpaca landing protocols.
4. Participation in growth if the movement is lower than 52 000 BUSD.
In this strategy, the deposit is kept and PUT options are purchased with a strike of 52 000 BUSD with expiration on October 15. The value of this option is 13 BUSD + 2.5 BUSD for the platform fee. We use the amount of 111 BUSD received from depositing in ALPACA to purchase 7 contracts.
Expected profitability:
In this strategy, losses are limited only by the premium, which is 111 BUSD. Responsibility for the safety of funds and a guarantee of capital return is on Venus / Alpaca landing protocols.
Risks:
- Liquidity will be sent on Alpaca / Venus protocols
- The options purchase has limited risk = option premiums = deposit income
If you have any questions, you can contact us as follows
via Telegramm — @DeltaTheta_Research
via email — Research@deltahteta.tech
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