Monday Alpha #43

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: Basis Is Back?

BTC ATM IV

• 1W: 41.78%

• 1M: 44.41%

• 3M: 48.73%

• 6M: 50.87%

• Index Price: $94,297

• DVOL: 46.61

ETH ATM IV

• 1W: 58.96%

• 1M: 61.66%

• 3M: 64.93%

• 6M: 66.78%

• Index Price: $1,803

• DVOL: 64.90

Things To Watch This Week:

• Wednesday May 7, 2pm EST - FOMC & Following Press Conference

• Thursday May 8, 8:30am EST - Unemployment Claims

Note: This week on the Marty X Premia Options Show we have Mr. Jake from Wintermute on, we will cover OTC options pricing and flows. Tune in 2pm EST / 18hr UTC!

Marty's Thoughts & Recap

The market doesn't lie. Let's go down memory lane… Imagine yourself in last November, Polymarket was the talk of the town, the burgers were divided on who would win and by how much. After a stale 2024 summer, we finally had a catalyst: an Election! Imagine the hopium you felt as BTC passed 100k, ETH ripping past 4k within the next few weeks post-elections… Now that we are mentally there, let's jump back to today. I highlight Nov 4 as the day before the elections. We dipped into elections and the uncertainty it brought; Trump wins the following day and we start to rip. BTC is still up 40%, while ETH is down 25%. We have had every catalyst possible to bring ETH to the main stage.

I want to go back and recap my article in late February called "Bullrun, but just for BTC". If I were to sum it up in one sentence it was… Just because it's a tradable product doesn't mean it goes up forever. We are seeing this unfold before our eyes. It seems it's a Bullrun but just for BTC. I'm happy to hear anyone's thoughts here, bull cases, etc… If we were to see it… we would have seen it by now.

Note: ETH has Pectra upgrade, and maybe staking in the ETF that we are still waiting for… SOL doesn't have an ETF yet. These are some possible catalysts to grasp onto… but when they happen… and market doesn't move… then what?

Now, as I write this… Gold is up 2.4%+, VIX +6.79%, while TradFi futures and Crypto are red. All of this uncertainty is still in the market, there have been no trade deals made, and the flip-flopping on policy daily is not working any longer. The Market is going to show its hand here and force some reactions from policymakers I don't think they are expecting to make. As for this FOMC on Wednesday, check the FED WATCH TOOL. It is free, it is saying no change. Since there is no change, the market will react more to his words and stance on policy during the briefing.

Crypto 1-Month Returns

From top to bottom, 1 month returns in large caps, mid caps, and small caps.

Green season, rebound season. After months of red and down only, we are starting to see a pick up in everything from majors to meme coins. Even though there has been a solid bounce, they are not anywhere near ATH for most.

Quick Chart Dump

Funding is still overall flat, even negative on some assets. XMR is HOT after a recent BTC hack and the fella swapped it all to XMR…

DING DING DING! We have some winners! Everything besides Gaming and L2 sectors are mega green this month. Biggest winner MEME, Biggest loser Gaming.

Basis is starting to get attractive again! Finally! 3 month annualized BTC 8.22%, and 9.55% for ETH! This is much more attractive than treasuries, I would expect a small uptick in Futures OI if basis remains elevated and people look for a “safe” trade to put on.

For those new to basis trading it involves buying spot, selling the dated future, waiting and capturing the difference. It is looked at as one of the most “safe” trades one can put on.

Basis was 20%+ last year, everyone put on the trade, and now it has unwound. What a crazy chart to see. Since basis is looking more and more attractive, I expect OI to uptick slightly, and we will revisit this in future newsletters.

Below are the same charts but in COINS instead of dollars.

This is the OI in TOTAL COINS vs the one above which is dollars. Across the board, the trade unwound, and OI nuked. It is good to show both OI in Dollar and coin amount. As ETH has dropped 50% this year, the Dollar amount looks worse than it actually is in coin form.

• Charts from VeloData: https://velodata.app/

• X: https://twitter.com/VeloData?s=20

Greekslive Block Trades

• To Join Greekslive Block Marketplace: t.me/GreeksLive

• Find Greekslive On Twitter: https://twitter.com/GreeksLive

We are grateful to get a peek into the largest trades provided by Greeks.live. These were the largest block trades this past week. Biggest notional was a May 9 put spread, which is looking very profitable as of now. Number 2/3 are short dated calendars. As always we can’t see the whole book… but number 4 is interesting, a Bear Call Spread put on for a credit. Sell June 100k and buy June 110k. The max profit is if at expiry the price is sub 100k with the structure starting to lose if BTC is over ~104k. A simple play that pays off if BTC is under 100k at expiry.

Wrap-up

Remember that uncertainty remains, and we have no clear direction as of now. BTC is trying to figure out whether its a risk asset or a safe haven, ETH is in a freefall on the year, and memes are catching a bid after getting giga nuked. I still stand by that its a bullrun, but just for BTC. I also continue to stand by the fact that revenue-generating projects are worth keeping an eye on, and that you shouldn’t be married to your bags. Happy trading pimps.

As we look into 2025, Premia V4 aka Kyan will be launching. With portfolio margin and perps, it will be a great place to check out, trade, and compete in future competitions for rewards. Majority of my 1st and 2nd quarter will be working with Mr. Weka writing educational content including more long form, advanced topics, and How-To tutorials. We may even do some videos as well for everyone to learn easily.

If there is something you want to see us write about and put in there, please reach out. For now, if you are interested in learning the basics of derivatives, please check out current edition of the academy at academy.premia.blue.

Thank you to all the readers who make this newsletter possible, we are sitting at about 4000+ email sign ups, and thousands of readers every 2 weeks. As for the Options Talk Show if you or someone you know wants to be a guest feel free to DM me, we are booking out April 2025 already!

Note: Email subscribers get the newsletter about 20 minutes early.

Recap:

• Basis is Hammered

• Pick Protocols That Make Money

• Bybit Hack Seems Swept Under The Rug (They Are Ok)

Trade on Premia: https://app.premia.blue/

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