- Blue Streak by Premia
- Monday Alpha #11
Monday Alpha #11
TL;DR: Institutional Adoption, Trading Comp, ETH Vols
Gm Anon, the alpha is free (on Mondays).
As it’s Monday, lets keep it short. If there is something you would like us to cover or go over in future editions, feel free to reach out. Marty’s Twitter DMs are always open.
Please note that Premia does not provide investment advice, and nothing herein should be construed as such. Anyone considering trading or holding derivatives or crypto assets should be aware that the risk of loss can be very high, and it is upon each individual to seek advice from an appropriate professional advisor.
TL;DR: Institutional Interest Upticks, Trading Comp, ETH Vols
BTC ATM IV
Index Price: $42,233
ETH ATM IV
Index Price: $2,245
Note: ETH vols trading higher than BTC.,
Things To Pay Attention To
U.S. CPI - 8:30am EST
U.S. PPI - 8:30am EST
U.S. Federal Funds Rate - 2:00pm EST
U.S. Unemployment Claims - 8:30am EST
Marty’s PNL Card
First things first: the Premia Trading Competition has kicked off! It's straightforward – you've got 8 weeks, with different trading criteria each week to snag some of the $100k prize pool.
For this first week, it's all about max PNL percentage. The top 5 traders each week will be walking away with a prize. Are you up for the challenge Anon? Come trade against Marty to see where you stand.
Weekly Insights from GreeksLive
This week, we extend our gratitude to GreeksLive for their consistent weekly insights and for providing these insights to our readers. The spotlight is on the most significant notional trade for the week — the December 15th 42k Put. Topping the leaderboard with just over 15mm notional, this trade has become notably successful as price fell last night.
Trade in Focus: The December 15th 42k Put emerged as the most notable trade of the week.
Current Status: This trade is currently at-the-money (ATM), indicating a favorable position for the trader.
Trader's Success: Though we lack insight into the trader's complete portfolio, this specific trade has proven to be a winning trade.
Market Activity Overview:
GreeksLive's block trade marketplace witnessed diverse activities this week. The trades varied across different strategies, with the more notable ones including:
BTC, ETH, NQ, GOLD Prices
30-day Correlation BTC, ETH, and Gold vs. NQ
30-day Correlation BTC and ETH vs. NQ
We're increasingly focusing on 30-day correlations between crypto majors and the NQ to gauge market sentiment. This correlation is crucial as it reveals how these asset classes respond to economic shifts and investor sentiment, guiding investment strategies and risk management.
Recently, we've seen a strong correlation uptrend, indicating synchronized movements in these markets. To keep our analysis clear, we're considering presenting data both with and without gold to avoid overcrowding the visual.
As we head towards the end of the year, it's worth examining the traditional finance landscape, especially in the context of Bitcoin's position on the CME.
Currently, CME futures and options for BTC and ETH are either hitting or at all-time high open interest. For the sake of a faster read, we are only showcasing BTC charts above. This surge in interest underscores the growing appetite for crypto products in mainstream financial markets. Importantly, it's important to recognize that these are cash-settled, not coin-settled. With all this heightened activity, there's a hype around the anticipated Spot ETFs and the Bitcoin Halving. While these new products are generating excitement, my approach will still involve observing the actual capital flow into them to gauge whether the interest is substantial or merely speculative.
The GBTC (Grayscale Bitcoin Trust) premium and its underlying value also present an up only trend. Comparing the current scenario with last year, the GBTC discount to NAV (Net Asset Value) has significantly narrowed down from 48% to 12%. This shift is a testament to the traders who believed in the value of this discount, invested at its low, and are now seeing the benefits of their conviction. Looking ahead, GBTC is expected to transition into a spot product. However, the timing of this change remains uncertain due to regulatory considerations in the U.S. We will keep a close eye on these catalysts.
In a bit of a change-up for our Monday Newsletter, I'm thinking of reserving the IV/RV charts and some other detailed graphs exclusively for our monthly edition. This shift is to streamline our weekly updates, making them more focused and digestible. But hey, this isn't set in stone. If you're missing these features in the weekly rundown, don't hesitate to slide into my DMs. I'm all ears for your feedback, questions, or even complaints!
Now, onto a hot topic in the crypto world: institutional adoption. We've been talking about it for ages, and now we're teetering on the brink of something big with the approval of Spot ETF products. These products could be game-changers, paving the way for more institutional money to flow into crypto. We're keeping an eye out to see how these products actually perform in terms of capital inflow.
It's one thing for institutions to show interest, but will they really come in and trade these products? That remains the million(billion)-dollar question.
Areas of Interest:
GBTC Discount Narrows
CME Open Interest Sky Rocketing
Correlation is Back Between Crypto Majors and NQ
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