AD Derivatives Podcast Featuring Bernd Sischka, CCO of PowerTrade

Welcome to the AD Derivatives podcast led by Director of Derivatives; Greg Magadini.

Featuring: Bernd Sischka, Founder of PowerTrade!

Bernd Sischka is the CCO at PowerTrade and today we discuss the novel offering of altcoin options trading at PowerTrade and the various tools that PowerTrade offers to their traders.

PowerTrade is transforming professional trading with innovative, accessible, and secure solutions for institutions and expert traders. Their dedication to excellence and continuous improvement fuels our pursuit of outstanding customer experiences and lasting partnerships.

Introduction and Background

In this podcast episode, we dive into PowerTrade's offerings in the cryptocurrency options market, particularly focusing on their partnership with BitMEX. Bernd Sischka, the Chief Commercial Officer at PowerTrade, provides an in-depth discussion on the vast variety of altcoin options they offer and the technical details that underpin these offerings.

Partnership with BitMEX

PowerTrade has established a partnership with BitMEX, a well-known cryptocurrency derivatives exchange, to integrate PowerTrade's liquidity for options trading into the BitMEX user interface. This integration allows BitMEX users to trade options without needing to undergo additional KYC (Know Your Customer) processes with PowerTrade. All funds remain within the BitMEX ecosystem, providing a seamless trading experience for users who can now access a range of options products offered by PowerTrade.

Multi-Collateral Support

PowerTrade offers multi-collateral support, allowing users to deposit various cryptocurrencies such as USDC, USDT, Bitcoin, and Ethereum. This feature enables users to utilize their Bitcoin holdings as collateral for trading options on other cryptocurrencies like Solana, enhancing capital efficiency through the span portfolio margin wrapper. This functionality, available on both PowerTrade and BitMEX, helps in optimizing margin requirements for traders, especially those engaging in strategies like selling covered calls.

Altcoin Options Market

PowerTrade has been rolling out a suite of altcoin options based on client demand. They currently offer options on a wide range of altcoins including Toncoin, BNB, XRP, Dogecoin, Solana, ARB, AVAX, LINK, and meme coins like Pepe and Shiba Inu. These options come with varying expirations and strike prices, providing traders with diverse trading opportunities. For example, the Toncoin options offer nine expirations from dailies to several months out, with tight spreads and USDC-settled premiums.

Market Making and Valuation

PowerTrade collaborates with third-party market makers who provide liquidity and pricing for the options. These market makers use proprietary models to determine the volatility and pricing of altcoin options, often referencing Ethereum's volatility surface as a benchmark. The quotes from these market makers are continuously updated to reflect real-time market conditions, ensuring liquidity and fair pricing for traders.

Risk Management and Trading Tools

To assist traders, PowerTrade has developed several tools, including a strategy explorer and an RFQ (Request for Quote) system. The strategy explorer helps traders identify profitable risk-reward opportunities by filtering through various option strategies based on selected criteria such as expiration dates and strike prices. This tool is particularly useful for both novice and experienced traders to visualize potential profits and losses.

The RFQ system allows traders to execute large or complex trades in a single transaction, ensuring they do not face market movement risks while legging into positions. This system is particularly beneficial for institutional traders looking to execute significant trades without impacting the market.

Educational Resources and Customer Support

PowerTrade is committed to educating traders about options. They offer educational materials on their website and provide personalized support through their Telegram channel and LinkedIn. Their strategy explorer and trading tools are designed to help traders understand and execute various options strategies effectively.

Advanced Trading Strategies

PowerTrade supports advanced trading strategies, including multi-legged spreads and relative value trades between different cryptocurrencies. For example, traders can sell Ethereum options and use the premium to buy options on smaller altcoins like Toncoin or Pepe, thus creating a hedged position that takes advantage of different volatility profiles.

Future Developments

PowerTrade is continuously expanding its product offerings and is open to feedback from users regarding new altcoins they would like to see listed. They are also exploring the potential for pair trading options, where traders can take positions on the relative movements of two cryptocurrencies, such as BTC vs. ETH or other altcoin pairs.

Conclusion

PowerTrade's innovative approach to cryptocurrency options trading, combined with its partnership with BitMEX, provides traders with a robust and versatile platform. Their focus on altcoin options, multi-collateral support, and advanced trading tools make them a significant player in the evolving crypto derivatives market. Through continuous product development and customer engagement, PowerTrade aims to cater to both retail and institutional traders, offering them unique opportunities to manage risk and capitalize on market movements.

For more information, users can visit PowerTrade's website, join their Telegram channel, or follow them on LinkedIn and other social media platforms.

AMBERDATA DISCLAIMER: The information provided in this research is for educational purposes only and is not investment or financial advice. Please do your own research before making any investment decisions. None of the information in this report constitutes, or should be relied on as a suggestion, offer, or other solicitation to engage in, or refrain from engaging, in any purchase, sale, or any other investment-related activity. Cryptocurrency investments are volatile and high risk in nature. Don't invest more than what you can afford to lose.