Time to Make the Leap

Leaps (options with an expiration of one year or longer) are some of the most interesting financial instruments. They give a market driven view of risk far beyond something that would expire in a week, let alone what’s gleaned in a spot transaction.

LedgerX is excited to announce to the ecosystem that this morning we matched a trade on our platform for the first 1+ year Bitcoin calls in history. It was for the $10,000 strike. These options expire December 28th, 2018, and they were traded at a price of $2,250.25.

Backing the implications of this out with industry standard options pricing based on nobel prize-winning research (see en.wikipedia.org/wiki/Black-Scholes_model) we can estimate the implied risk characteristics that traders were pricing into this trade.

So what we find is that this price implies a probability of approximately 25% that Bitcoin will be above $10,000 by the end of next year.

The data that this gives our industry should not be under appreciated — even if you do not know about, care, or trade options on BTC, this information will better inform risk managers for any investor interested in investing in spot Bitcoin.

I want to give all credit for this milestone to our regulators and customers who have made it possible for such a dynamic new asset class. And we’re still just getting started.

Myself and the rest of the LedgerX team will be working in shifts throughout the holiday to provide, improve, surveil, and iterate on products and services like this that we are proud of.

Happy Thanksgiving,

Paul