Options trade is a potent tool in the cryptocurrency world. Users can gain price exposure through a popular derivative method and reap potential profits from doing so. However, the Chainge Options market introduces a slightly different take on this concept.
Options Trading And Cryptocurrencies
Not everyone wants to invest in cryptocurrencies directly and worry about storing them in a wallet. However, speculators and traders do want exposure to crypto prices due to their volatility and price potential. Options trading is a good fit in that regard, as it provides that price exposure without any unnecessary bells and whistles. In addition, as a low-risk and low-cost option to explore this new money paradigm, option trading platforms often note strong growth.
Several noteworthy companies provide exposure to crypto assets through these investment vehicles. Names include OKEx, Deribit, premia Finance, FinNexus, and many others. The main selling point of options is achieving profit regardless of which direction the asset or market heads in. It requires some knowledge to enter the market, but it is still viable for new and advanced traders alike.
Overall interest in cryptocurrency options trading also seems to increase in the past few years. It is evident there is tremendous potential for new entrants looking to make an impact. Projects like Chainge DEX can provide additional services and claim to provide an "infinite universe of options trading." However, the team's approach has merit in expanding the available options.
How Does Chainge DEX Work?
The main selling point of this new service is how it democratizes the listing of options tied to particular tokens. Through the online form, anyone can list options with the requested exercising price. It is up to Chainge community members - users who hold the CHNG token - to vote on these new requests. If the vote has over 1 million CHNG-based votes, the new option will automatically be listed in the Chainge option DEX. A simple process that gives everyone a chance to expand the available listings, assuming there is sufficient support and demand.
For every listed option, Chainge deploys a smart contract with writing and exercising options. That approach ensures this market remains decentralized. Holders of options tokens can exercise the call option, use it as a regular crypto asset, or sell the call option token through a USDT-based trading pair. Another possibility is adding liquidity to the Option DEX market for that token/USDT pair.
Chainge DEX supports both call and put options. The method above is reversed for put options, as users can inject USDT to write put options for particular tokens. Holders of put option tokens can inject back the token to get the corresponding USDT amount, use it as a crypto asset, or sell the put option token. Similarly, there is an option to provide additional liquidity.
It is also very beneficial for projects to list options. Not only will it motivate the community, but it can also lead to broader exposure for the project and the native token. Through call options, tokens can be sold at a potentially higher price and show confidence in the project. Additionally, teams can use put options to buy back tokens from the market, but at a potentially lower price than normal.
Closing Thoughts
The decentralization of options markets helps broaden access to cryptocurrency exposure. Moreover, letting users vote on which options to add for specific assets creates an unlimited market potential. As Chainge DEX already has 400,000 users, it can prove worthwhile for projects and coin developers to create more exposure for whatever they are building.
Moreover, options have higher volatility than the underlying token but maintain a high correlation. In essence, it is more profitable to trade options than tokens if the market goes in the right direction.
