Why do we need NFT options
Last updated
Last updated
Derivatives play a very crucial role in financial market, investors use derivatives to hedge against their investment. In fact, the crypto derivatives market is much more liquid than the NFT market, as the world’s leading NFT trading platform OpenSea, for example, trades at a rate of about $70 million a day, while the daily trading volume of crypto derivatives on Binance, for example, is $43 billion.
By introducing derivatives to NFT market creates new opportunities to attract investments and greater liquidity to the NFT marketplace via the secondary market. It allows investors to hedge against the risk of losing market value, it also provides an opportunity to short an NFT and invest in NFT with leverage.
As a holder
Protect our NFT investment from the volatile market. If you are holding a BAYC with a current floor price equal to 80ETH, you can buy a put option with a strike price of 78ETH. If the floor price drops to 70ETH, you could exercise the option and sell your BAYC for 78ETH.
If you think the floor price will not rise in a short period, you can sell a call option and earn the premium to make extra income.
As an investor
Investing in a Bluechip NFT can be costly. DoubleWeb3 NFT option allows investors to hold a leveraged position in an NFT at a lower cost than buying the NFT directly.
For example, if you think the floor price of BAYC will rise by 10 ETH within a month. You can buy a BAYC call option for 0.5ETH and exercise the contract when the price moves up.
On the other hand, if you think the price of BAYC will move down, you can also buy a put option and make money when the price sinks.
