Week 51 + 52: Final Update 2018
Volatility exploding due to expiration dates closing in
After last weeks update turning into an opinion piece about Ethereum, Augur and crypto in general, this week we will close off the year with a normal update and chart of the last two weeks.
When looking at the charts of the end of 2018. It is interesting to see the implied volatility increasing steadily.
This effect can be easily explained as almost all markets tracked by us for calculating our indexes are expiring at the end of 2018.
The volatility needs to increase by an higher and higher amount so the underlying price would have a chance to reach the strike prices of the derivative markets when the time till the market expires becomes shorter and shorter.
On one hand that is an interesting fact to think about and why it might be profitable to find trades when the underlying is far away from the strike price and the market is close to expiration, it also underlines a reality of Augur today, that there are just not many liquid markets to actually create volatility indexes and KPIs comparable to the ones known from traditional stock and future markets.
For 2019 we will look forward how new products build on top of Augur like Veil or Guesser will introduce new people to the markets and maybe create more liquidity, that will enable us to make more interesting derivative market analysis.
But first we should all celebrate and welcome 2019 as it will be for sure another year where a lot of new interesting things will happen in our space 💥 💃 🎵
About us
AugurInsider is building the authority for KPIs about derivative markets on the decentralized market protocol Augur that lives inside the Ethereum blockchain.
