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Delta Exchange (https://delta.exchange/), a digital asset derivatives exchange, announced today the launch of its Enhanced Yield Product on BTC and ETH. These are structured products that employ Options strategies to generate passive income for investors. These products remove complexities of Option selling, margin-ing and risk management by automating these processes and allow passive investors to participate in high yield generating opportunities with clearly defined outcomes and risk tolerance.
“Just as ETFs will make it simple for investors to own Bitcoin without having to understand how to manage custody, private keys etc., our new enhanced yield products are focused on giving investors easy access to the Options markets,” said Pankaj Balani, CEO of Delta Exchange. “This product is focused on helping investors participate in more complex Options strategies without having to execute them directly. It is focused on generating high yields, given the investors’ market outlook with little to no management.”
Structured products offer investors the potential to earn returns that are tied to the performance of an asset over a certain timeframe. They are commonly used in traditional financial markets. Bringing structured products to the cryptocurrency ecosystem helps investors enhance the performance of their portfolios while adding liquidity to Options markets, generating a much higher yield than other avenues such as lending or reward-coin yield in DeFi. Delta Exchange’s Enhanced Yield BTC, for example, is currently offering up to 90% yield per annum. This yield is denominated and paid in BTC or ETH terms respectively.
In order to participate in an enhanced yield strategy, a trader must deposit funds to their Delta Exchange wallet, and then allocate those funds to the “Enhanced Yield Strategy” of their choice. The strategy works by selling out of the money Call Options on BTC or on ETH and pocketing the Option premium (yield).
Scenario: The Enhanced Yield BTC looks to generate higher yield on BTC holdings by selling upside in BTC beyond a certain price on a certain date. If an investor is of the opinion that BTC will remain below a certain price (K) by the end of a certain time (T), then they can subscribe to the Enhanced yield product. The strategy sells Options of strike (K) with maturity (T). If at expiry the price of Bitcoin is more than K then investor’s Bitcoins are sold at price K. If the price remains below K then investors continue to hold their Bitcoins. Thus the investor makes 1 BTC + yield or ‘$K + yield’. The high yield is generated by sacrificing upside beyond a certain point on a certain date.
“We have seen increasing demand from passive investors for enhanced yield and other structured products that help investors generate higher returns depending on their market outlook,” continued Pankaj Balani, CEO of Delta Exchange. “As the options markets continue to mature, structured products are becoming viable and we expect to see rapid growth in this segment.”
To learn more about or to begin trading on Delta Exchange please visit: https://www.delta.exchange/
