METASEER will be the 1st in the market to offer hybrid options
Hybrid Options is the first of its kind in the crypto space and can only be found on the METASEER platform. It’s an innovative version of traditional vanilla options that works on a shorter time frame and placed on blockchain infrastructure. On METASEER, depending on the users’ view of the market, they are able to trade hybrid options in 6 different ways with equitable risk to return:
- In the Money (ITM) Call
- At the Money (ATM) Call
- Out of the Money (OTM) Call
- In the Money (ITM) Put
- At the Money (ATM) Put
- Out of the Money (OTM) Put
In the Money (ITM) Call and Put give its holder a statistical edge of the option to expire in profit at the point of entering the trade. However, with the additional edge, it comes with a lower payout ratio.
At the Money (ATM) Call and Put are neutral and do not grant its holder any statistical advantage or disadvantage.
Out the Money (OTM) Call and Put give its holder a statistical disadvantage of the option contract to expire in profit at the point of entering the trade. However with that risk, it comes with a higher payout ratio.
What does the ITM, ATM and OTM option mean?
a Call option is:
- “At the money” if the current asset value is equal to the defined strike price
- “In the money” if the current asset value is above (>) the defined strike price
- “Out of the money” if the current asset value is below (<) the defined strike price
Conversely, a Put option is:
- “At the money” if the current asset value is equal to the defined strike price
- “In the money” if the current asset value is below (<) the defined strike price
- “Out of the money” if the current asset value is above(>) the defined strike price
In addition, do note that the METASEER payout structure is fixed and users are able to measure their probability of profits by the price difference between strike price and current price. Hence, users only have to analyze whether the price will go above or below a specific price.
As for the range of assets that will be offered for speculation, METASEER is primarily a financial platform and therefore eventually would like to offer hybrid options on crypto, commodities, shares and forex. This would play a huge role in attracting mainstream investors to the fray. These assets will play a huge role in the METASEER ecosystem as the team believes that options trading can serve as a bridge which connects the traditional financial realm to crypto.
Every option will have a different payout ratio based on their moneyness and duration to expiry. This was an introductory article to Metaseer’s hybrid options — look out for more articles!
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