Research Summary
The report discusses the introduction of Miden, a zero-knowledge rollup by Polygon, which enhances Ethereum’s scalability, transaction speed, and privacy. It suggests a Call Ratio Spread strategy for traders who have a bullish perspective on Polygon. The report also provides a step-by-step guide on how to execute this trade on Deribit.
Key Takeaways
Polygon’s Miden Rollup
- Introduction of Miden: Polygon has introduced Miden, a zero-knowledge rollup that enhances Ethereum’s scalability. This technology allows users to generate proofs for their transactions without exposing the details to the entire network, thereby improving privacy and scalability.
Call Ratio Spread Strategy
- Strategy Proposal: The report suggests a Call Ratio Spread strategy for traders with a bullish perspective on Polygon. This involves buying an out-of-the-money (OTM) call option and selling two or more of the same option type with the same expiry, further OTM.
Trade Structure
- Trade Details: The report provides a specific example of the Call Ratio Spread strategy, involving buying 1x MATIC_USDC-31MAY24-$0.80-C @ $0.0079 and selling 3x MATIC_USDC-31MAY24-$0.85-C @ $0.0039. The target spot level is less than $0.85.
Payouts and Profit
- Profit Potential: The maximum profit from this strategy is $53.8 per contract, with a net credit of the strategy being $3.8 per contract. However, losses beyond the initial credit are possible due to the position’s net short call exposure.
Execution on Deribit
- Trade Execution: The report provides a step-by-step guide on how to execute this trade on Deribit, including selecting the options books under MATIC_USDC, choosing the expiry, and executing the trade.
Actionable Insights
- Consider the Call Ratio Spread Strategy: Traders with a bullish perspective on Polygon may consider the Call Ratio Spread strategy as a potential trading approach.
- Understand the Risks: While the strategy has potential for profit, it’s important to understand the risks involved, including possible losses beyond the initial credit due to the position’s net short call exposure.
- Explore Miden’s Impact: The introduction of Miden by Polygon could have significant implications for Ethereum’s scalability, transaction speed, and privacy. Traders and investors may want to explore the potential impact of this technology on the market.
