A Friendly Suite of Options on Alpha5
Featuring Exotics: Parimutuel and European Digital Options
Vanilla options are not inclusive to all types of traders, and the team at Alpha5 feel that there is room for a complementary set of instruments and features that simplify the product offering, but still retain novelty. Parimutuel options are very common in sports, whereas European Digital Options are more frequently seen in traditional trading houses, but don’t have any real presence in cryptocurrency markets. The lack of these exotics creates a hole in the market that Alpha5 is diligently going to fill.
Parimutuel options are a way of speculating on the future price of cryptocurrencies that don’t require owning the underlying coins themselves. In this case, sellers need not exist, and settlements are paid from a common pool.
With this offering, odds and payouts are market-determined and are a function of supply/demand. It allows for a fun, engaging way to capture market movement with limited risk.
With European digital options, the contract either pays out a fixed cash amount or nothing depending on whether the settlement price is above, below, or within a range of specified levels. As a result, the absolute risk and reward is always known at the outset. This gives traders the ability to capitalize on digital risk, benefiting from particular outcomes in the market in a path-independent manner, that suits a set-and-forget style of investing.
Alpha5 aims to introduce these instruments, and many more, to help facilitate the expansion of derivatives in the ecosystem. Stay tuned for details on the platform launch in Summer 2020.
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