Hi, we are Quedex Bitcoin Futures and Options Exchange. Currently, we are offering options on BTCUSD exchange rate.
Adding options on e.g. ERC-20 tokens is not technically difficult, but there are multiple financial issues with that.
First, altcoins and tokens share similarities with penny stocks, which have risk/reward profile similar to call options themselves. Why trade options on something already option-like?
The second issue is that selling options fully collateralized as you propose would require allocation of significant capital, allocation that is difficult to justify given the low expected volumes. Have you seen any OTC interest in such options?
While you mention that there were multiple projects for distributed options exchange, trading on an on-chain platform is completely pointless given the recent Ethereum network fees. And even if the fees were negligible, there is still issue of latency and transaction throughput.
That being said, if you just want to hedge your altcoins portfolio, simply buy put options. Keep in mind that, in the moves like recent ones, when Bitcoin falls 10%, nearly every other coin also takes a nosedive :-)
Topic: Why are there still no Options exchanges? (Read 87 times)
Yeah i did research that actually, however they only offer Bitcoin Options not altcoins, and also they're European style options.
Options are a core part of any serious investment market. They will help prevent the incredible price swings we view currently in the cryptosphere and allow serious instruments to be created as hedges against many events, thus attracting serious institutional investors. I'm not talking about Bitcoin futures or European Options, but proper American style Options for all coins and ERC-20 tokens. It would be so very easy and simple to create Options for any and all alt-coins on a decentralized exchange, all that would need to be done is the following -
1) For Call options, the seller must simply deposit into a locked smart-contract the quantity of tokens that are being sold in the Option. If the Option is exercised these tokens are sold to the Option holder at the strike price of the Option, which would be automatically transferred from the smart-contract to the Option seller in return for releasing the tokens to the Option holder. If the Option expires, then the tokens are automatically transferred back to the Option seller.
2) For Put options, the seller must deposit a quantity of USDT/BTC instead of the token in equivalent amount of the strike price. The process is the exact same for the Call other than this.
I see an awful lot of ICOs launched, and finished, that advertise they will create exchanges with Options for ERC-20 and other tokens, yet until now it's not been done. This would be an awfully simple thing to do for any major exchange such as Bitfinex, Binance etc, and would not require any more difficult development than making a simple exchange would. I'm guessing the reason the centralized exchanges don't do this is due to securities laws. Hence why a decentralized exchange would be needed. But why doesn't EtherDelta or idex.market do this? It's beyond me.
I've tried recruiting programmers before to launch just a very simple exchange, something even shittier than EtherDelta, but that allows people to sell Options. Yet I can't find any interested progammers. Are people in cryptocurrency just genuinely unaware of how essential and game-changing the ability to buy and sell Options for ERC-20 and other tokens would be? It would be huge, and it's a simple thing to do. I'm genuinely baffled as to why it doesn't exist yet.
1) For Call options, the seller must simply deposit into a locked smart-contract the quantity of tokens that are being sold in the Option. If the Option is exercised these tokens are sold to the Option holder at the strike price of the Option, which would be automatically transferred from the smart-contract to the Option seller in return for releasing the tokens to the Option holder. If the Option expires, then the tokens are automatically transferred back to the Option seller.
2) For Put options, the seller must deposit a quantity of USDT/BTC instead of the token in equivalent amount of the strike price. The process is the exact same for the Call other than this.
I see an awful lot of ICOs launched, and finished, that advertise they will create exchanges with Options for ERC-20 and other tokens, yet until now it's not been done. This would be an awfully simple thing to do for any major exchange such as Bitfinex, Binance etc, and would not require any more difficult development than making a simple exchange would. I'm guessing the reason the centralized exchanges don't do this is due to securities laws. Hence why a decentralized exchange would be needed. But why doesn't EtherDelta or idex.market do this? It's beyond me.
I've tried recruiting programmers before to launch just a very simple exchange, something even shittier than EtherDelta, but that allows people to sell Options. Yet I can't find any interested progammers. Are people in cryptocurrency just genuinely unaware of how essential and game-changing the ability to buy and sell Options for ERC-20 and other tokens would be? It would be huge, and it's a simple thing to do. I'm genuinely baffled as to why it doesn't exist yet.
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