The Perpetual Option
The Perpetual Option is a funding-based derivative that can express an arbitrary number of payoff functions, including the one used by the Perpetual Future. This document provides a high-level overview of the Perpetual Option.
Andrew Borum
50 Crypto Market Making Firms That Are Active In 2024
0+: A Double Digit Sharpe HFT Strategy
Ever wondered how HFT strategies work?
Today, we'll explore the 0+ HFT strategy - a strategy that has been practiced for decades by various HFT firms - but remains largely unknown to the public.
0+ is all about speed and market microstructure. If you can't be
Perpetual Options vs. European-Style Options - What's The Difference?
The perpetual option is a relatively new type of exotic option (introduced in 2021) that seeks to rival the traditional, European-style option.
It distinguishes itself by having no expiration, funding (a novel concept that makes the volatility premium continuous, rather than lump-sum), and floating strike prices (strike prices that follow
How An Obscure OTC-Traded Derivative From the 80's Took Over Crypto
This is the story of the perpetual future - a financial derivative that went from being an obscure OTC-traded derivative that nobody cared about - to being the largest and most successful derivative in the crypto space, trading more than $18T annually.
The Inception: Late 1980's Hong Kong
Everstrike Launches First Floating Strike Perpetual Options
Dubbed as “the perpetual future of options”, the floating strike perpetual option is a novel type of option that doesn’t expire, and that remains relevant in perpetuity. It was originally introduced in May 2021, by Paradigm researcher Dave White, in a paper titled Everlasting Options.
“Perpetual options give traders
How Exchanges Handle Position Liquidations: A Brief Overview
Liquidation procedures vary widely across crypto exchanges.
This article provides an overview of the most popular ones.
Full, Immediate Liquidation
* Your position is transferred to the liquidation engine at its bankruptcy price.
Duration: 0 seconds.
Time: Immediately after your liquidation price is hit.
Result: -100% equity.
Fees: No fees. You
Mark Price, Index Price, Fair Price: How Are They Calculated?
A solid price index is essential for any crypto derivatives exchange.
The primary purpose of the price index is to help the exchange in establishing “The One True Price” — the price that the exchange uses when evaluating whether to liquidate a position or not.
The last traded price (Last Price)
Market Making 101 — Part 2
In the last section of this series we covered the very basics of market making.
We covered the fundamentals that make market making a viable strategy and introduced the adverse selection problem.
In this article we will explore some simple ways to deal with the adverse selection problem.
Quick recap
Market Making 101 — Part 1
You buy a Bitcoin for $8000 and sell it for $8010.
You just made a $10.
You keep doing this all day. Buy for $8000, sell for $8010.
At 5 pm, you have sold 99 Bitcoins and made $10x99 = $990.
Let’s make it $1000
You place an order to