- 1 Overview of 1x Short BTC Implied Volatility Token
- 2 Want Daily IBVOL Price Updates?
- 3 How Do You Buy/Sell BVOL Tokens?
- 4 How Do BVOL Tokens Work?
- 5 How Do BVOL Tokens Rebalance?
- 6 What is Inverse Bitcoin Volatility Token?
- 7 Why are BTC-PERP contracts included?
- 8 What Exactly Do BVOL Tokens Represent?
- 9 What Are BVOL Tokens?
- 10 What do you think about the 1x Short Bitcoin Implied Volatility Token today?
- 11 What Are The Fees?
- 12 Why does this type of hedge work?
- 13 What do BVOL Tokens hold?
- 14 History of 1x Short BTC Implied Volatility Token
Overview of 1x Short BTC Implied Volatility Token
higher than yesterday.
Want Daily IBVOL Price Updates?
How Do You Buy/Sell BVOL Tokens?
There are multiple ways to do so.
How Do BVOL Tokens Work?
Each BVOL token gets its price action by trading FTX MOVE contracts and BTC-PERP contracts. For instance, say that you want to create $10,000 of BVOL . To do so you can send in $10,000, and the BVOL account on FTX buys $10,000 worth of FTX MOVE contracts and shorts $10,000 of BTC-PERP contracts. Thus, BVOL is now 1x long MOVE and 1x short BTC-PERP.
How Do BVOL Tokens Rebalance?
Every day at 00:02:00 UTC the BVOL tokens ‘rebalance’. That means that each BVOL token trades on FTX in order to once again reach its target leverage and roll its positions.
What is Inverse Bitcoin Volatility Token?
BVOL tokens get their exposure to implied crypto volatility using FTX MOVE contracts.Inverse Bitcoin Volatility Token (IBVOL) attempts to track the daily returns of being 1x short the implied volatility of BTC.
Why are BTC-PERP contracts included?
To give an example say that BTC is expected to move 1% per day. If BTC is trading at $10,000, then the daily move is $100; but if BTC falls to $9,000, the daily move is $90. This means that if implied percent volatility doesn’t change, a decrease in BTC price will lead to a decrease in BVOL price and an increase in iBVOL price.After this change, the decreased dollar-based move of BTC (from $100 to $90) will be offset by the gain in the BTC short position in BVOL (short $100 of BTC-PERP will gain $10 from BTC falling to $9,000), and so BVOL and iBVOL’s price won’t change.
What Exactly Do BVOL Tokens Represent?
In order to get their volatility exposure, BVOL tokens trade FTX MOVE contracts and FTX BTC-PERP. In particular, they aim to hold 1/6th each of each MOVE contract that has not yet had its strike price determined as of each rebalance.
What Are BVOL Tokens?
BVOL tokens are ERC20 tokens that attempt to track the implied volatility of crypto markets.
What do you think about the 1x Short Bitcoin Implied Volatility Token today?
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What Are The Fees?
There are two types of fees on BVOL tokens. There is a 0.10% creation and redemption fee; note you only pay this if you create/redeem, not if you buy in a spot market or convert. There is also a 0.03%/day management fee on BVOL tokens. This is just taken out of the net asset value of the BVOL tokens; you won’t see an actual token balance decrease or USD charge in your account.
Why does this type of hedge work?
This is not always intuitive for traders, who are not used to using an asset as collateral for margin trading the dollar price of that same asset.For example, trading the BTC/USD pair and using BTC as collateral instead of USD.
What do BVOL Tokens hold?
BVOL hold MOVE contracts and BTC-PERP contracts on FTX. That means that they will get their exposure to the underlying assets through the MOVE contracts and BTC-PERP futures. That also means that they will be subject to the price movements, premiums, market conditions, trading fees, etc.of the MOVE and BTC-PERP futures.