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Paradigm TBP Episode | Altcoin Options are set to Moon in 2024 With Amberdata Co-Host, Greg Magadini, Director of Derivatives at Amberdata on December 13th, 2023

In this installment of The Big Picture, STS Digital's, Head of Asia, Trader Jeff Anderson dives into the emerging landscape of Altcoin Options. Joe and Greg explore in-depth the correlations in volatility, Paradigm flows, and the innovative option Greek tools currently in development at Paradigm. This marks the final episode of TBP for 2023, and we certainly ended the year on a high note!


The conversation opens with hosts Joe Kruy, Greg Magadini, and Marty to give a warm welcome to Jeff Anderson, Head of APAC at STS Digital, to discuss the crypto options market. As 2023 draws to a close, they reflect on the growth of their show and express gratitude to the audience.

Jeff's Background

Jeff Anderson, an FX options trader with a 15-year background in investment banks, shares his journey into the crypto space. He joined STS Digital after leaving traditional finance in 2019, focusing on options trading. STS Digital operates as a market maker, liquidity provider, and engages in various crypto activities, from OTC desks to token market making.

Market Overview - Bitcoin Options

Greg Magadini presents an optimistic base case for Bitcoin options leading into the spot ETF decision. He discusses the historical positive spot volatility correlation during bull markets and the potential for explosive volatility in the current environment. Jeff adds insights into realized volatility, emphasizing the significance of options trading in a market with extreme price movements.

Volatility Dynamics

The analysis extends to spot volatility correlations, comparing historical volatility data from January 2021 to the present. They explore the potential for explosive volatility similar to previous crypto events and considers the implications for options trading.

Option Strategies

Greg shares an option strategy based on the Ethereum proof-of-stake upgrade in September 2022, suggesting a delta-neutral approach to capitalize on potential volatility leading up to the spot ETF decision. Jeff supports this strategy, emphasizing the importance of managing risk and the unique dynamics of the crypto options market.

Paradigm Flows

Marty provides insights into recent flows on Paradigm, highlighting a significant position in the BTC vs. Ethereum straddle. They also discuss the implications of this trade and observe increased interest in call calendars, especially in the January-June and March-June expiry periods.

Altcoin Options Market

The conversation shifts to altcoin options, with Jeff sharing experiences and strategies in this dynamic market. He emphasizes the non-normal distribution of price actions in altcoins and the need for caution in trading these highly volatile assets. Discussing the potential for growth in altcoin options and the role of market makers in providing liquidity.

Altcoin Options Strategies

Jeff discusses various altcoin options strategies, including selling call options for operational yield and collaborating with foundations and treasuries. Exploring the benefits of using options for altcoins and the challenges associated with market dynamics.

Future Outlook

The discussion concludes with a positive outlook for the altcoin options space in 2024. Jeff highlights the importance of education for foundations and treasuries on the value of options in managing risk and generating yield. The team expresses optimism about the continued growth of the crypto options market.

View Paradigm's YouTube channel here.

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