Monday Alpha #29

TL;DR: Never Trust the Sunday Pump

Author

Marty
October 21, 2024

Monday Alpha

Attention! This week we have Matt Voska from Chaindrop as a guest on the Premia X Marty show! We will cover rollups as a service, and the future of DeFi. Will be streamed on Wednesday at 2pm EST, 18hr UTC on the Premia X account.

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: Never Trust the Sunday Pump

BTC ATM IV

  • 1W: 45.20%

  • 1M: 54.18%

  • 3M: 54.66%

  • 6M: 57.13%

  • Index Price: $63,483

  • DVOL: 56.24

  • BVIV: 58.83

ETH ATM IV

  • 1W: 52.70%

  • 1M: 61.07%

  • 3M: 61.53%

  • 6M: 64.28%

  • Index Price: $2,477

  • DVOL: 64.07

  • EVIV: 66.99

Weekly Insights From GreeksLive

Some huge notional volume traded the past week through Greeks.live Block Trade Marketplace!

All calendar plays, interesting flows the past week. Election is upon us, and no crazy outright call buying (yet), the past week was filled with various calendar plays. Notable other flows we are tracking there has been a lot of yield strats, like covered call selling, but nothing out of the ordinary.

Hope to see more apes join the party, cross the spread, and increase vols into election.

2-Week Crypto Returns

2-week crypto returns are so back. Uptober gave up the whipsaw from Rektober, Uptober, and now today just October. Lots of coins outperforming, and lots are underperforming. The Sunday pump became a meme, and got instantly nuked back to reality this morning. Never shove on a Sunday, wait for the market to develop. It seemed like someone shoved on perps last night trying to create some move. I am always wary of a Sunday pump, TradFi markets are closed, options market somewhat dead over weekend lately, and traders come back to their desks Monday morning.

BTC & ETH Implied Volatility Term Structures

I feel like a broken record here… Front end is absolutely hammered and continues to be suppressed. There is a notable kink for election days… Everyone seems to be sitting on their hands awaiting US election day. Vol is meant to be sold. Front end is still trading low 40 handle for bitcoin… I would hope to see front end lifted into the election. If not? Then it is truly over.

Options were approved and pending trading on BTC Spot ETF. I will write about the long term meaning of this and market dynamics overtime in the next Monthly Recap which will be launching around the first week of November.

Note: There is still a kink for the Nov8 Expiry

Crypto Funding APR Heatmap

This is 1 month funding accros Large Market Cap coins. Market is dead… Nothing heated up for more than a short while, market is inline with expectations.

Crypto Sector Performance

Memes are the clear winner here. As readers may know, I am no fan of memes. I don't get it, I don't participate, and maybe I am just sidelined and coping? Sometimes I get the itch to gamble a little and throw some money in memes, I see them pumping… And then by the time I get around to it, the coin is down 99%. Maybe I am the ultimate meme top caller? Quite possible.

It is not healthy for market dynamic for memes to be running the show and all participants getting rugged. I know my editor-in-chief, Master Weka is reading this and laughing at me as he has probably out performed our fund on the memes alone. This is great, but it’s just a game I don't understand well enough to consistently win. Stay safe out there pimps.

Marty’s Thoughts

The October whipsaw is real, memes are leading the show, and gold is flying… I don't want to sit here and be a mega bear. I’m always long spot, and we love it when you cross the spread. Last newsletter I covered that jobs reporting and US data collection is flawed, and their revisions are not helpful to the market. I hope to give our readers a clear and somewhat contrarian approach to looking at the markets than UPTOBER, MEME CITY, 100X LEV nonsense…

Today I want to just quickly mention some things I am reading about and seeing:

  • Buffet dumping banks

  • Gold Flying like the world is going to end

I’m not going to sit here and say that a black swan is coming and that the world is ending… But these things are correlated and something to watch. Don't get caught over-leveraged and balls-deep long on the wrong assets. Pick wisely.

BTC is the clear winner in this cycle so far. Institutional eyes are on BTC, and ETH inflows are close to none lately which helps BTC widen the gap. Recently, I went to a conference where Blackrock was speaking to Brazilian institutions, and funnily enough, they skipped over the ETH section entirely. The recent inflows have been insane for BTC, some of which seem to be paired with short futs to create the basis trade (article coming soon). The recent uptick in flows could also be linked to players wanting to participate in options on the ETFs as well. These larger players do mostly quarterly type plays, and the market dynamic will shift overtime. I will cover this more in the monthly recap first week of November with examples.

To end on a happy note, this week we have Matt Voska from Chaindrop as a guest on the Premia X Marty show! We will cover Roll ups as a service, and the future of Defi. Will be Streamed on Twitter 2pm EST, 18hr UTC.

Recap:

  • October whipsaw

  • Memes outperforming

  • Vol is meant to be sold

Trade on Premia: https://app.premia.blue/
Marty Community Telegram: https://t.me/optionswithmarty

Mind you there is never a paid group, all information is free and we will never ask you for money.

DeFi Options Premia

Join the next generation of Decentralized Finance with Premia (V4) and Archetype

Premia v4 brings forth portfolio margin, perps, and the most liquid options book on Arbitrum. Stay tuned for more updates!

Maximize capital efficiency, define your own risk, and optimize fees earned with Premia Blue on Arbitrum!

Reply

or to participate.