How to Synthesize Dual Currency Investments Without a Middleman (Selling Crypto)
6 min readJan 24, 2022

Since 2019, a large number of institutions have been offering dual currency investments (DCIs) to their clients. The dual investment of cryptocurrency is an agreement to a strike price above the spot price, and when the price of cryptocurrency is above the strike price upon delivery, the cryptocurrency is sold into U; when the price of cryptocurrency is below the strike price upon delivery, the cryptocurrency is retained. Besides, an additional annualised return is also provided to the customer.

Most of these products will be hedged on the Deribit Exchange, which has 90% of the depth of the options market. For example, if an institution makes a client a large pie of $45,000 DCI with an annualised rate of return of 20%, it will immediately sell a covered call on the Deribit Exchange at 47% of the annualised premium (data from Binance Dual Investment and Deribit collected on 14 January, 2022). The toll fee in between is up to 50–60%. Certainly, institutions do not necessarily have to strictly perform B2B hedges. They can also manage the Greek values of the entire options order book with the means market makers use to manage positions. It is relatively easy to manage this anyway with high slippage income.

(Previously, I wrote an article detailing what a covered option is. Those interested may search for it.)

Since the toll fee is so high, why don’t clients go directly to sell covered calls themselves? There are several issues here.

1. Only the absolute value of the premiums, not the annualised value of the premiums, is shown for each expiration date and each strike price on the Deribit Exchange. It is not convenient to compare annualised rates of return across different expiration dates.

2. The margin on Deribit is either BTC or ETH. USDT and USDC are not available for the time being. If an option is in the money (ITM) upon expiration, users need to keep an eye on the market themselves upon expiration and use the inverse contract to hedge.

3. Users need to take a further step to find a way to swap the entire hedged position into USDT/USDC on another exchange.

4. Users are unfamiliar with the profit and loss and settlement process of options.

Regarding the user experience of the internet industry, every small improvement means a huge increase in user stickiness and a competitive advantage. It is the presence of the operational difficulties mentioned above that legitimises the income from toll fee of various institutions because of the various facilities they offer. offers a wide range of options trading tools based on Deribit. In this article, I will introduce how facilitates users in the first and second points above. Those with certain learning ability can now take advantage of the tools offered by to save on high toll fees.

Annualised value of the premium

On the latest version of the website, there is a choice of “APY” in the optional column below the T-shaped quote list. Once this has been ticked, the screen shown below will appear.

Screenshot 1

The “APY” shown here refers to the annualised rate of return if the user directly takes an order to sell the option based on a full margin of a covered call. It can be compared to a dual investment product with the same expiration date, as shown below.

Screenshot 2

With the “APY” display bar, it is possible to compare the return rates of covered options with the same strike price but different expiration dates.

For example, if today is 17 January, 2022 and the spot quote is $42,700. I wish to sell a batch of coins at $50,000 in the future, and I am not sensitive to how long I have to wait before the expiration date. Then I will just go and pick the expiration date with the highest annualised rate of return at the strike price of $50,000 among different expiration dates. The comparison is listed as follows:

21 Jan 2022, 4.41%

28 Jan 2022, 9.83%

04 Feb 2022, 15.09%

25 Feb 2022, 25.18%

25 Mar 2022, 31.26%

24 Jun 2022, 30.24%

30 Sep 2022, 27.36%

30 Dec 2022, 24.81%

It can be seen that the covered call option with a strike price of $50,000 expiring on March 25, 2022 has the highest annualized rate of return and the length of waiting is moderate.

With this tool, it is possible to save the trouble of manually converting annualised returns and to compare quotes directly across different expiration dates.

Advanced Trading Tools page also offers a solution to the need to keep an eye on the market for ITM delivery upon expiration in the Advanced Trading Tools.

Login to the main account on in one tab of Chrome. And in another tab, as shown below, select “Authorize Through Deribit Account”.

Screenshot 3

Then enter the list of advanced trading tools. Select the target sub-account here under account selection, and then select BTC auto-synthetic delivery.

Screenshot 4

Tick the “Switch” in the setup details and submit to initiate automatic delivery. Expiring ITM positions will be fitted for physical delivery using perpetual contracts.

If you sell a call option, such as 2 $50,000 ITM Calls, you will sell a total of $100,000 in perpetual contracts to hedge the margin.

If there are options in the portfolio that you do not wish to take synthetic delivery upon expiration, you can tick the “Ignore” box next to the corresponding position.

For more information, please refer to the “Instructions for Use” on the aforementioned page.

Screenshot 5

Note: Due to interruptions in connectivity to the Deribit server from time to time, the delivery service may fail for various reasons. A prudent recommendation is that users should keep an eye on whether the delivery service has been performed properly and fully during the delivery period of 3:40–4:00 pm on the expiration date.

Conversion of hedged positions into U

Thereafter, there is a “USD equivalent” on the Deribit Exchange where the margin is permanently hedged. To continue with the above example, suppose the BTC price is $51,000 and there is a hedged position of $100,000 on Deribit, which translates into a bitcoin volume of 100,000/51000 = 1.9608 BTC.

In order to take this “USD equivalent” out, I can do the following:

1. Set aside 2 BTC at the Spot Exchange.

2. Buy perpetual contracts worth USD 100,000 on Deribit to close out positions.

3. Sell BTC for USDT or USDC on the Spot Exchange, also for $100,000 (or 1.9608 BTC).

Once the above operation is completed, the USD equivalent on Deribit is converted to the spot exchange.

I have heard that Deribit will follow up with a USDC margin. So, this step can be greatly simplified. Step 3 can then be done directly within the exchange.

When should the premium be taken out?

In the various dual investments, users have to wait for the expiration dates to take the premiums out.

In the case of options exchanges, my advice is that when you know exactly how much BTC/ETH premium you have received after selling the call option, you can sell the funds across exchanges into USDT/USDC and cash out the returns. This avoids the inconvenience of having to go back weeks or months later for the trading records to find out the amount of premium back then.

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I hope you find this article helpful.


January 17, 2022



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