Oct 10, 2022

5 min read

How Greeks.live Can Help Dual Currency Investors Get Higher Returns

I. What is Dual Currency Investment?

Here is a video about Dual Currency from Matrixport:

The essence of dual currency investment is to sell options, a derivative instrument, and hold coins on margin.

Depending on whether the coin-based or USD-based (the stable coin, USDC for example) dual currency, the idea of dual currency investment is slightly different.

Coin-based dual currency investment is to hold BTC or ETH as margin and sell call options.

If the price of BTC or ETH rises, the value of the coin in your portfolio will rise; if the price of the coin falls, the coin will be replaced with a stable coin and the quantity goes up.

USDC-based dual currency investment is to hold USDC (or other stable coins) as margin and sell put options.

However, the commission of dual currency products on the market is generally 30%-50% of the option premium. If you can make dual currency investment by your own, then there will be no middleman to take the price spread.

Greeks.live provides a series of convenient options tools based on Deribit and Bybit to facilitate you to construct your own dual-currency investment. The coin-based dual currency products can be made at deribit.greeks.live, and the USDC-based dual currency products can be made at bybit.greeks.live.

Next, we describe how to use the tools provided by Greeks.live to make a dual currency product by yourself step by step.

II. How to use deribit.greeks.live to make a coin-based dual currency product

Suppose you have 10 BTC in Deribit, and you want to use it all for self-constructed coin-based dual currency investment.

( i ) Optional column of T-quote table — APR and distance

Go to deribit.greeks.live and login with your Deribit account and password or API Key, and check “APR” and “Dist” in the optional columns below the T-quote table. After checking, “Bid/Ask APR” will appear in the column name of the T-quote table, and the percentage will appear below the strike price.

“APR” stands for Annual Percentage Rate, and it represents the annualized yield of buying or selling a particular option premium. “Dist” is short for distance, and it represents the percentage distance of the strike price from the current spot price.

As shown above, the “Ask APR” is the annualized yield when you take the order to sell this option based on a full margin provision.

( ii ) Floating window to compare APR for different expiration date

It’s October 4, 2022 and the BTC spot is $20,000. Suppose you want to sell BTC at $25,000 in the future and don’t care about how long you wait for it.

Next, you can use our floating window to compare APR among different expiration date as shown below. Use the mouse to hover over the strike price and the window to the right of the strike price to visually compare the APR of buying and selling at the same strike price at different expiration date.

As you can see, the Ask APR of Calls from March 31, 2023 is the highest. Then you can choose to sell 10 BTC-31MAR23–25000-C.

( iii ) Use the Greeks.live Auto Synthetic Delivery tool that simulates physical delivery

If the BTC-31MAR23–25000-C is ITM (in-the-money) when expired, you are required to stare at expiration and hedge with a reverse contract. However, this can be simplified by using the Auto Synthetic Delivery tool that we provide.

After selling the call options, click on the sidebar hidden by the logo in the upper left corner and click on “Advanced Tools”.

Then go to the list of advanced trading tools and choose Auto Synthetic Delivery for the corresponding coin (in this case, BTC).

In the setting details, check the switch on and submit it again to start automatic delivery. ITM options will be simulated for physical delivery using perpetual contracts.

Selling 10 $25,000 call options, that expire ITM will sell a total of $250,000 in perpetual contracts and hedge the margin.

For more information, please refer to the instructions in the upper right corner of the web, as shown by the arrow below.

III. How to use bybit.greeks.live to make a USD-based dual currency product

Suppose you have 150,000 USDC in bybit, and you want to use it all to make your own USD-based dual currency product.

Use the bybit API Key to access bybit.greeks.live (currently only supports API login). Similarly, check the “APR” and “Dist” in the optional columns below the T-quote table. After checking, “Bid/Ask APR” will appear in the column name of the T-quote table, and the percentage will appear below the strike price.

As shown above, the “Ask APR” is the annualized yield when you take the order to sell this option based on a full margin provision.

It’s October 4, 2022, and the spot quote is $20,000. Suppose you want to buy 10 BTC at $15,000 in the future and don’t care about how long you wait for it.

In the future we will have a floating window on bybit.greeks.live (similar to the floating window on deribit.greeks.live) to compare APR among different expiration date. Currently you need to manually switch between different expiration date for comparison.

The comparison is now as follows.

14 Oct 2022, 6.59%

21 Oct 2022, 7.69%

28 Oct 2022, 10.11%

25 Nov 2022, 13.97%

30 Dec 2022, 13.38%

As you can see, the Ask APR of the Puts on 25 Nov 2022 is the highest. Then you can choose to sell 10 BTC-25NOV22–15000-P.

In the future we will also go live with the synthetic delivery feature on the bybit station. At this stage, you still need to hedge your manual delivery on the day of expiration.