Above video shows a tutorial on option arbitrage on ETH/BTC
So, in above app l deposited ETH and hedged the downside (bought a put option).
If the ETH price drops upto 20% then I'm hedged on the downside for that loss
The hedge validity can be 1 day, 1 week or 1 month.
After the hedge validity is over, the hedge expires and can be renewed.
As long as the hedge is active, I can close my position and claim the hedge profit. So if ETH falls 15% within the hedge vailidty period, then I get back my full ETH **plus the 15% hedge gain**.
Now, this hedging is very cheap. I am able to buy this put option for like 50% lower price than other option exchanges.
So, I now go to a full-blown option exchange
And sell a put option on same ETH asset for 50% higher price for the same hedge validity period.
This allows me to not only get the premium back but also make an extra profit through the option arbitrage
I am currently experimenting with this strategy by buying daily hedges for the last 2 months
and been working fine
My ETH exposure remains delta neutral
Also, now will experiment with BTC.