any how, Me, I no bi Nigerian I bi Romanian. 
| Washers+Bolt+Nut | EUR 3.00 (Sold By Weight) |
| Blockmit Jig | free |
| n0nce Jig | EUR 30.00 |
| Sledgehammer | EUR 12.99 |
| Anvil | EUR 9.90 |
| Stamps | EUR 28.79 |
| Safety Labels 100x | EUR 12.99 |
| Container | EUR 15.27 |
| Gloves | EUR 2.50 |
| Duct Tape | EUR 03.99 |
| Microfiber Cloth | EUR 01.00 |
| Hot Glue Gun | EUR 09.50 |
| Circle Stickers | EUR 00.90 |
| Indelible Marker | EUR 8.13 |
| GRAND TOTAL | EUR 138.96 |
 |  | |
Where I dey do the work for outside. Look d washers wey don spoil wey I throway.
July 04, 2022, 02:44:11 PM
Translated Topic in Pidgin Language: Everythin u wan know about BTC option bt u dey fear 2 ask
Original Topic: Everything you wanted to know about BTC options but were afraid to ask! Authur:fillippone Options wey dey bitcoin hav bin accessible only 2 whales nd dey very specific exchanges as Deribit, bt wen Bakkt nd CME, di 2 kamkpe traditional bitcoin exchanges go open di products 2 their clients option trading in bitcoin go bcome more widely open 4 everybody. Ehen, options trading has been open on Bakkt since December 9th, wey CME go launch a simila thins later dis month, starting trading 4rom January 13th. Options deh strong things 2 trade. Dis deh true 4 traditional markets, but dis deh even more true in a wild market like bitcoin. With dis thread, I go try 2 give a few practical nd practical wey go dey understandable, price nd use options. I go start reveal wat an option dey, explaining all d characteristics of di options nd wat dey mean 4 di investor. Den I go briefly explain how 2 price dem. I no go explain di details wey di mathematical side l used 2 price dem, becos he go imply som advanced different calculus wey nobodi wants 2 hear about. Wat I go try do 2 convey wat factors hav an impact on option price nd how 2 interpret dos. I go dey try 2 clear di field 4rom som common misconceptions about options. Las I go explain small common strategies 4 options trading. Nothin 2 strong, just small example on how 2 use dem according 2 di investment purpose: be it speculation or hedging. INDEX
Weti bi option Option wey bi contract dat gives di holder di faculty, bt nt di obligation, 2 trade an asset, called di underlying asset, b4 di expiry, di ending date of such contract. Di option dat gives di holder di thinking 2 buy di underlying asset wi dey called call option. Di option dat gives di holder di thinking to sell di underlying asset wi dey called put option. Di price at di trade go happen is called di strike price. Wen an option generates a trade den wi say it is "exercised", if not he go simpli ends without ani trade put in place wi say it is "abandoned". If na option wey bi exercised only at di ending we dey called am European Option, while if wey bi exercised anitime b4 di ending dey called American Option. Di price di buyer of di option pays to di seller, or di writer of di option, wi dey call am di premium. If di market price wey dey up di strike price, di call option wi dey call am "in-the-money", bcos in di case of American exercise he go fit exercised with profit. If not, di call option wi dey called am "out-of the-money". If di market price dey below di strike of di put option, di put option wi dey called am "in-the-moni", bcos in di case of American exercise he go bi exercised with profit. If not, di put option dey called "out-of-the-moni". If wi luk at a certain strike den, onli call options or put option go bi in-di-money, not both of dem. 4 example, if wi luk at 10,000 strike options, di calls go now out-of-di-money, while puts go dey in-the-money. Wen he don expire, if di option go generate di underlying asset weti e don bin priced dey called “physical delivery”. Mani commodity or financial options dey physically settled. Alternatively, na option go regulate onli di moni wey e dey good go make profit exercising di option itself: dat expiry den na in-di-moni option e don deliver di buyer a cash amount di same 2 di difference between di asset price nd di strike (in case of a call option) or di difference between di strike price nd di asset (in case of a put option). In this case, di option dey called cash-settled. In di mata of Bitcoin options, namely di Bakkt options wey bi BTC futures, di option dey physically settled: at di expiry of di option di in-di-money option generates an appropriate position in di underlying future. There’s only a peculiarity: as e dey common on mani commodity options, di option itself expires some days b4 di future, so di holder of di in-di-money options has di possibility 2 close di future position b4 di real delivery of di underlying of di future (di option has di future as underlying, di future has di bitcoin as underlying). Dis is y u probably heard some marketing nonsense where “Bakkt options allow u 2 choose di type of delivery: physical or cash)". B4 analysing mathematically how 2 market an option, we go see dat impact di marketing with di intuition. STRIKE: Di first element dey di strike. Of course, di difference between di market price and di strike dey di first hint at di value of an option. Intuitively di more an option dey in-di-money, den di more such an option must have value. Wen an option dey in-di-money, such an option has intrinsic value. 4 both call nd put options, di intrinsic value dey equal 2 di difference between di underlying market nd tdi strike market: intrinsic value onli measures di profit as determined by di difference between di option's strike market and market price. Wen an option dey out-of-di money instead, di intrinsic value deh zero. Di intrinsic value dey di minimum value of an option: if di value of an option go bi less dan di intrinsic value, go bi arbitraged, buying dat option nd exercising it 2 profit. So wen BTC dey trading at 7,000, a call with strike K = 5,000 dey in-di-money nd has an intrinsic value of 2,000, so di market must bi greater dan dat. At di same time, a call with a strike K =10,000 has no intrinsic value, so di intrinsic value dey zero. Of course, intrinsic value dey onli a part of di marketing of an option: oda things impact di option marketing each won of dem adding value 2 di intrinsic value getting di final value of di options: TIME 2 EXPIRY: di second most important element wen marketing an option dey di time 2 expiry: di longer di time 2 expiry, di dearer di option. If wi market 2 options with all characteristics wey dey equal, bt di exercise date, di won with di exercise date di furthest away, go have di greater price. VOLATILITY: di greater di volatility of di underlying asset, di greater di value of di option. Here di explanation e gets small bit tricky. Wi go say dat di konkon reason he no go pass di volatility of di underlying, di greater di possibility of di underlying going in-di-money. We go see later why dis dey gud, make dis no dey obvious. di option e no profit 4rom di option going in-the-money. E no profit only if di option goes in-the-money. di buyer of di option benefits just bcos di underlying asset walker (i.e. e deh volatile) under a risk-neutral approach, i.e. without taking di “risk” of profiting bcos di option goes in- di -money. we go see example: We buy a call option on BTCUSD, with a strike price of 8,000 USD, expiring in June 2020. Di way dey named Long call bcos buying something dey called being "long" in finance jargon. di premium for dis option e dey 1,350 USD, wi ve 2 pay fast fast ("upfront", again in finance jargon). Fast forward 2 option expiry. Di outcomes of our option e dey differ according to di final price of bitcoin: If BTCUSD e dey down to 8,000 USD di option go abandoned, it expires worthless. If BTCUSD e dey up to 8,000 USD di option go exercised, nd generate a payoff equal to di difference (positive) among BTCUSD nd di strike price. In more formal terms di call option payoff e dey di following: Call=max(0;Spot-Strike) Di endingl payoff of di strategy go be di following:  Note dat dis graph considers we paid a premium of 1,350 USD upfront, di premium go paid in every scenario: if di option expires worthless di P&L (Profit&Loss) of di strategy e dey bad and equal 2 di premium paid, otherwise e dey equal 2 di option payoff netted with di premium paid. Note dat di P&L starts increasing at di strike price level, 8,000 USD in dis matter, but breaks even at a higher level equal 2 di strike + di premium plaid, or 9,350 USD in dis example. Make we see di same thing for a put option. We buy a put option on BTCUSD, with a strike price of 6,000 USD, expiring in June 2020. Di strategy dey named long put. Di premium for dis option dey 732 USD, we hav 2 pay "upfront". Fast forward 2 option expiry. Di outcomes of our option differ according 2 di final price of bitcoin: If BTCUSD deh above 6,000 USD di option go deh abandoned, it expires worthless. If BTCUSD dey below 6,000 USD di option go deh exercised, nd generate a payoff equal 2 di difference (positive) between di strike price nd di BTCUSD. In more formal terms di put option payoff dey di following: Put=max(0;Strike-Spot) Di final payoff of di strategy go be di following:  di graph luks familiar, as e dey di symmetrical payoff than di call. Note dat di graph considers we paid a premium of 732 USD upfront, di premium must be paid in every scenario: if di option expires worthless di P&L of di strategy go deh negative nd equal 2 di premium paid, otherwise is equal 2 di option payoff netted with di premium paid. Note dat di P&L go dey high at di strike price level, 6,000 USD in dis matter, but breaks even at a lower-level equal 2 di strike - di premium plaid, or 5,267 USD in dis example. Wi go hav a luk at an options exchange luking for confirmations. All di examples come 4rom Deribit, who dey di only widely available source 4 option prices: creating an account dey easy nd e no require KYC. If u come interested 2 do am 4 educational purposes. Of course standard disclaimers apply nd I linked 2 dat exchange. If wi select BTC options, nd den 26 Jun 2020 wi go find a screen like di following:  (click on di image 2 enlarge it) Dis particular page considers di options maturing on 26 Jun 2020. Di centre grey column represents di strike levels. Di options on di same row share di same strike price. On di left of dat column, we have di call options 4 each strike, while di puts come deh on di right-hand side. di bid price na di price where oda pipo want 2 buy di options, i.e. di price u hav 2 sell at if u want di sell am. Di ask price na di price where oda pipo want 2 sell di options, i.e. di price u hav 2 pay 4 if u want 2 buy am. Each bid nd ask price has a corresponding Implied Volatility level, nai bi di volatility level dat, if inputted in di model, gives back di aforementioned price. Dis na y speaking of options, volatility nd price come exchangeable concepts. As we dey see am early, we see dat di calls hav a diminishing price wen di strike goes up: di 6,000 call has a mid-price (di average between di bid nd di ask) of 0.29725 BTC, while di 10,000 call has a mid-price of 0.11275 BTC. Di opposite dey true 4 di puts. Di puts with lower strike hav lower premiums. Di put stuck at 10,000 has a price of 0.46075 BTC, while di 6,000 put has a mid-price of 0.09725 BTC. Also, we go see dat examining options with greater time 2 expiry each option has a greater value: di 10,000 USD strike call maturing in September has a value of 0.16775 BTC versus the value of 0.11275 of di same option maturing in June. Di 6,000 strike put has a value of 0.13175 BTC versus di value of 0.09725 of di same option maturing in June. If we plug di data we find on dat page in an options calculator we go reprice di option itself. If we try 2 reprice di 8,000 USD call, inputting 0% as di interest rate (BTC dey 4 non-dividend paying asset) nd di correct information about strike, underlying nd implied volatility, we get di (almost) exact valuation we hav on Deribit:  Di numbers wey deh down di option price na di "greeks" or di sensitivities of di option price 2 their different component: DELTA: na di sensitivity of di option price 2 di underlying: if di underlying go up 1 USD, di option price go up 0.55 USD. GAMMA: na di second-order sensitivity of di option price 2 di underlying: if di underlying go up 1 USD, di option delta go up 0% (I guess there's a rounding factor here 2 consider in dis calculator) VEGA: na di sensitivity of di option price 2 di volatility level: if di volatility go up 1%, di option price go up 20.54 USD. THETA: na di sensitivity of di option price 2 di time: if 1 day passes, di option price go down 4.39 USD. RHO: na di sensitivity of di option price 2 di interest rates: if interest rates go to 1%, di option price go up 13.49 USD. Di greeks of an option e don linked 2 each other in a pretty difficult way, e get many ways 2 interpret dem nd they all varies continuously given di level of di market, di volatility nd di time 2 maturity. Books hav been written on how 2 tame dem nd use dem in your favour. I think dis very brief explanation e deh ok 4 dis thread. How 2 price an option Understanding di details of how options dey priced, would mean understanding very advanced mathematics, including stochastic calculus, differential calculus, statistics, etc. Here I go only give u a few important concepts, u hav 2 keep in mind wen thinking of options nd their value. Black&Scholes won di Nobel prize 4 their option pricing model. Their biggest achievement was 2 demonstrate nd e deh possible 2 price an option using non-arbitrage conditions. Arbitrage na di trade where a profit dey gained involving no risk nd no capital. Of course, dose trades e no deh exist, so markets go adapt demselves 2 avoid dese situations. Thinking under di “non-arbitrage” conditions, means also dat no risks go involved, hence di individual appetite 4 risk of each different trader in di market go bi taken out of di equation. Dis means dat every trader in di market go think using d same “language” of a world without risk (if we think with no-arbitrage conditions, we go ignore di associated risk, den we go ignore di willingness of every trader 2 take dat risk). Dis means di price of such a derivative dey unique, irrespective of di risk appetite 4 each trader. Dis won has di important consequence di price of an option dey INDEPENDENT of di probability given by each trader about di possibility of di underlying ending in-di-money. Dis na something wey wi hav 2 keep in mind: di price of an option e no mean automatically dat di scenario where e deh ends in-di-money dey more “plausible”. Historical Volatility vs Implied Volatility As wi go see di only “difficult” input 2 price an option dey di volatility 2 bi used. Di correct number 2 bi plugged into 2 pricer dey di expected future realised volatility until di expiration of di option. Quoting dis number means quoting di price of di option (being di other option pricing numbers deterministic, i.e. known without uncertainty). Di volatility level used 2 price an option dey called implied volatility bcos na di level of volatility “implied” by di quoted price. How do u quote di future volatility? Here’s di trick of options trading. Di first idea e go look at di realised volatility: looking at di past go give first guidance of di future volatility. Of course, dis won e no deh always true as e go be many factors dat go change di volatility in di future. One easy example, specific 2 bitcoin options go bi di halving. Dis event, according 2 many models, go hav a great impact on di bitcoin price. So wi go guess dat coming into di halving d volatility go bi low: bitcoin might move, but without great variations, but once di halving happens, di price go possibly start swinging more, due 2 di very different valuation di S2F model implies. In dis case realised volatility won’t bi gud guidance 4 di future volatility: namely di realised volatility go bi much lower dan di future volatility used 2 price options with expiries after di halving. Many websites calculate di realised volatility of bitcoin: on Deribit u get get won. Calculating historical volatility with different horizons yield very different results:  In di above graph, wi see di bitcoin price (black line, left axis), with di superimposition of different historical volatility calculations using different terms (yellow, red and blue lines, right axis). Volatility in di short term go bi more “volatile” itself (yes, na di volatility of volatility, but dis na 4 advanced options trading). Di yellow line represents di annualised historical volatility calculated using di previous 10 trading days, nd as wi see in di above graph dey swinging more violently, 4rom 180% 2 below 20%. Volatility calculated over more extended periods of time, like di blue line (calculated over di last 30 days of data) or di red line (calculated over di last 180 days of data) dey instead more nd more stable as wi extend di calculation interval. Of course, wi deh more interested in matching, with di caveat earlier explained, di historical volatility computation with di time 2 expiry of di option wi want 2 price. Di implied volatility go instead bi observed on options markets. If wi luk at di options screen above wi see some IV columns: dat dey di implied volatility corresponding 2 each quote. If wi use di model in di opposite way, wi go use di price as an input nd find di volatility implied into dat price: dat dey di implied volatility. Option strategies - How 2 use an option Options go dey very complicated instruments, here I want 2 highlight only a few uses of dem. Dese go bi most simple ones, nd all hav in common 2 bi “static” strategies. Dis means dose go meant 2 bi put in place nd not touched until maturity. There go bi different strategies meant 2 bi adjusted during di life of di option. Dese go totally different animals nd wi dey call am dynamic strategies. Leverage Trading Scenario: U want 2 gain as much possible exposure 2 bitcoin. U hav a very clear trading view. U no dey interested in losing ur capital if dis view e no deh materialise. Strategy: Use ur funding 2 pay di premium 4 an out-of-di-money option, choosing di strike 2 maximise di expected final payout. Example: - Buy 1 call option strike 7,000 USD, Jun Expiry at 0.233 BTC. alternatively - Buy 1 call option strike 8,000 USD, Jun Expiry for a total of 0.1805 BTC.  Analysis: In dis scenario, u hav gained exposure 2 di appreciation of bitcoin above di strike level using only a fraction of di capital required 2 buy di underlying (i.e. 1 bitcoin). In di case of bitcoin being at a price of 10,000 at expiry, in di case of a bitcoin investment, u would have a return equal 2 (10,000-8,000)/8,000=25%. Dis na di base case scenario of no leverage. Buying an in-di-money call option di return would bi instead (10,000-7,000-1,742)/1,742=72%. Note dat if di option gets further in-di-money di return go go up even further as di option paid e dey constant, while di gain increase linearly. In di second example, wi bought an out-of-di-money option, using even less capital. In di case of bitcoin being at a price of 10,000 at expiry, di yield go bi in dis case (10,000-8,000-1,350)/1,350=48%. Of course in di scenario of an opposite movement, ur loss dey limited 2 di premium paid, which e go lost entirely. Dis implies dat u hav 2 choose wisely not only di strike level, 2 gain di correct level of exposure, but also di expiry, as di movement has 2 materialise B4 di expiry of di option. Covered call writing Scenario: Na u bi whale u want 2 sell part of ur bitcoin holding 2 finance ur daily expenses. u go bullish on bitcoin as an investment. Strategy: Sell out-of-di-money calls, cash in di premium 2 finance ur expenses, actually sell bitcoin only if di price go up (possibly on a spike). Example: - long 1 bitcoin, - sell 1 option strike 10,000 USD, Jun Expiry at 0.11 bitcoin.  Analysis: Di payoff of di structure gives u a benefit over di simple holding of bitcoin equal 2 di premium if di price dey below di strike price at maturity. If at expiry di price dey above dey strike, dey option go go in-di-money nd u sell di bitcoin. Di strategy has a break-even, compared 2 bi long di BTC only, at a level equal 2 strike + premium received (in dis example at 10,000+0.11*7,478=10,826 roughly). If di BTC go further up, u basically sold a bitcoin at 10,826, hence di strategy has a lower value against holding di bitcoin. Collar Scenario: U bi whale. U want 2 sell part of ur bitcoin holding 2 finance ur daily expenses. U bi bullish on bitcoin as an investment. U get pissed off in case of a violent drawdown in bitcoin prices. Strategy: Sell out-of-di-money calls, cash in di premium 2 finance ur expenses, actually sell bitcoin only if di price go up (possibly on a spike). Use di cashed-in premium 2 buy protection on di downside, i.e. buying a put option. Buying an out-of-di-money call nd selling an out-of-di-money put is a strategy known as "Collar". Example: - long 1 bitcoin, - sell 1 call option, strike 10,000 USD, Jun Expiry at 0.11 BTC, - buy 1 put option, strike 6,000 USD, Jun Expiry for 0.098 BTC.  Analysis: Di final payoff is similar 2 di won of di covered call writing. Di payoff of di structure give u a benefit over di simple holding of bitcoin equal 2 di difference between di premiums paid 2 buy di put nd di premium cashed in 2 sell di call. In dis particular case, I chose 2 strike levels 2 hav di smallest positive difference between di twos. If di price dey below di strike price at maturity. If at expiry di price dey above di strike, di option go in-di-money nd u sell di bitcoin. Di strategy has a break-even, compared 2 bi long underlying, at a level equal 2 strike+premium received (in dis example at 10,000+(0.11-0.098)*7478=10,093 roughly). If di BTC go further up, u basically sold a bitcoin at 10,093. On di contrary, if BTC go down, u also bought protection at 6,000, as u dey long a 6,000 put. More precisely, as u cashed in a premium of 93 dollars, u dey protected at a 6,093 USD. In case bitcoin go down more, u no dey affected, as di payoff of di put protects u on di downside. Word of caution. Options dey very complicated topic. I tried ma best effort 2 explain dis topic in di most simple nd intuitive way. I go expand di thread in di direction u prefer. Just ask mi 2 explain wat u dey interested in most, or just ask mi 2 clarify di point u want mi 2 dig more precisely. If u think dis thread or any other of my threads dey worth 2 bi translated in ur own local board, please do! I go happy 2 provide assistance! Useful resources: Online Calculators: Option Calculator Exchanges product information: Option on Bakkt ™ Bitcoin (USD) Monthly Futures Options on Bitcoin Futures Online courses: Basic: CME Option Course Advanced: Options Theory for Professional Trading Dis post dey eligible 4 ma project: Quote I bi strong believer in di utility of local boards. I dey lucky enough 2 bi able 2 express myself in at least a couple of languages, but I know dis won no bi case 4 everyone. plenti users post only on di local boards bcos of a variety of reasons either language or cultural barriers, lack of interest or whatever other reason. I personally know a lot of very good users (from di Italian sections mainly, for obvious reason) who no dey post in di international sections. I think all dose users dey miss a lot of good contents posted on di international (English) section or on other boards. If u think u go help here, just visit di thread! Jump to:
|
