Pay-focused cryptocurrency XRP
Soared 12% in the past 24 hours, outperforming Bitcoin and Ether (ETH). This double-digit gain has raised the price of XRP to $3.32, the highest level since July 28.
The basis for price increases is the basis for refined expectation block options trading on deribit, involving bullish bets on volatility. Blocking transactions are large transactions executed in the Public Order Book to minimize their impact on the ready-made market price of assets.
The first trade executed Thursday involved 100,000 contracts that expired on August 29 and voted on options for a strike of $3.20. Traders paid over $416,000 in premiums for the so-called long-term leap strategy, which profited from the wild swing in either direction. A similar large leap was booked for a $3.10 strike.
Lin Chen, head of Asia at Deribit, told Coindesk that XRP’s institutional interest is growing, and that is a large amount of non-directional flow.
“XRP outperforms BTC this year, and now we are seeing a surge in block trading and institutional interests for XRP options. We have also launched the year-end XRP option to meet that demand,” Chen said.
Traders use multinational corporations when anticipating major volatility events, such as large revenue reports, critical court decisions or large product releases – but are uncertain whether the impact is bullish or bearish. The risk-reward profile for long-term leaping is defined by unlimited profit potential and limited risk.
Coincidentally, Thursday, the SEC and Corrugated Shared consent Waived the appeal in the Second Circuit case, ending a prolonged legal quarrel. Ripple uses XRP to facilitate cross-border transactions.
Limited loss, unlimited profit strategy
The maximum loss limit for long-term crossovers is the total premium for making calls and put options.
However, since the price can move up and down indefinitely, the maximum profit is unlimited. To break, the price must move in either direction, the amount equals the total premium paid.
Options are derivative contracts designed to protect traders from bullish or bearish volatility. Call options mask upward trends in underlying assets, while PUT options provide insurance for market swings.
