Re:Show HN: Bitcoin derivatives – call and put options
by simon_ on Monday March 24, 2014 @05:55PM
(#7461905)
I will be interested to see if this works. Best of luck to you, but I am skeptical.
For an options market to work you need both buyers and sellers of volatility. Is anyone really going to show up to sell vol here? At what kind of price?
Even if we assume that BTC is infinitely liquid and sellers of options could do theoretically perfect dynamic hedging, my guess is that implied vol is so extremely high that prices will look crazy and expensive to potential options buyers.
For an options market to work you need both buyers and sellers of volatility. Is anyone really going to show up to sell vol here? At what kind of price?
Even if we assume that BTC is infinitely liquid and sellers of options could do theoretically perfect dynamic hedging, my guess is that implied vol is so extremely high that prices will look crazy and expensive to potential options buyers.