Paradigm Unveils 'Block Trading' Facility for MATIC, SOL, XRP Options

MATIC

As an experienced analyst in the cryptocurrency market, I see this development as a significant step forward for institutional investors looking to trade altcoin options in a more efficient and cost-effective way. Paradigm’s introduction of block trading for linear altcoin options on Deribit is a game-changer that reduces slippage and ensures minimal impact on the going market price.On Monday, Paradigm, the crypto over-the-counter liquidity network, unveiled a new block trading facility on Deribit, a leading derivatives exchange. This facility is specifically designed for options based on prominent altcoins, including MATIC, SOL, and XRP.

Clients have the capability to conduct large transactions in Polygon (MATIC), Solana (SOL), and Ripple (XRP) through Paradigm, as announced on X. Notably, these trades come with linear options featuring payouts that mirror the price fluctuations of the underlying assets.

Derivative contracts referred to as options provide the purchaser with a flexible choice, devoid of any mandatory commitment. By a designated expiration date, these contractholders can either acquire or dispose of the underlying asset at a previously agreed price. A call option represents the ability to purchase, whereas a put option signifies the privilege to sell.

Large-volume futures, options, or complex trades conducted privately between participants are referred to as block trades. Communication platforms such as Paradigm facilitate the negotiation process, enabling parties to request quotes and reach agreements on pricing. Once terms have been settled upon, the trade is forwarded to an exchange like Deribit for execution and clearing procedures.

One way to put it: Block trades help minimize the expense and price fluctuation that come with executing large transactions by allowing them to be carried out as a single, larger trade instead of multiple smaller ones.

Starting in 2016, Paradigm’s Over-the-Counter (OTC) network has been a go-to destination for institutional investors looking to execute large bitcoin and ether trades. With close to $400 billion in total volume transacted so far, the platform holds a significant market share, accounting for approximately 17% of the overall options trading activity on Deribit as of May.

As a crypto investor, I’m excited to share that Paradigm’s new offering has gained traction in the market. Last Monday, I learned about the successful execution of its first trade between two prominent players, Singapore-based QCP Capital and Galaxy Digital. They engaged in a 50,000 unit MATIC call spread transaction.

As a cryptocurrency market analyst, I’d describe the transaction as follows: I engaged in a derivative trade that consisted of purchasing call options for MATIC, specifically at strike prices $0.80 and $0.95, with expiration set for May 31. This deal was executed through Paradigm, which served as the intermediary platform. MATIC is an essential component of the Polygon Network; it functions as the native currency for staking purposes and processing gas fees.

“Luuk Strijers, CEO of Deribit, announced with excitement the extension of Paradigm’s block trading services to incorporate linear altcoin options, marking the first deal in MATIC options on our platform. This development not only enhances our collaborative offerings but also paves the way for groundbreaking blocks in SOL and XRP in the near future.”

2024-05-14 08:58

Paradigm Unveils ‘Block Trading’ Facility for MATIC, SOL, XRP Options

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