press release
PRESS RELEASE. Flynt Finance, the cryptocurrency financial services company based in Singapore co-founded by previous derivatives exchange operators and analysts, launched a platform for crypto structured products last week. The relatively high returns (up to 50% APY) on Flynt has gained strong interest from crypto yield enthusiasts, especially during the bear market where volatility is harder to come by.
Cryptocurrency markets are often thought of as the go-to place for high-risk high-return due to the volatile price movements. Managing risk for such assets can be complex, especially for those that do not have a financial background.
A popular way to hedge is to use options by entering into positions opposite to current asset holding. For example, holding spot bitcoin and buying a put option when you expect some downward price action. Although still a nascent field compared to perpetual futures, crypto options are a great way to hedge your volatile positions both during times of chop and strong trends.
There are also various structured products that provide yield with combined strategies of options, lending, and futures. One of the simplest and most popular structured products is the covered call strategy or a cash covered put strategy. Even the legendary Warren Buffet has famously used this to earn premiums on Coca-Cola stocks.
Since 2021 there has been a rush to offer covered call strategies on various cryptocurrencies for the yield-hungry crypto investors. These strategies have been growing rapidly since their inception and have held up surprisingly well during the more recent downturn.
After rigorous research and backtesting various strategies, the team at Flynt decided to launch their very own structured product strategy, the “BTC Covered Call Strategy x5”. This strategy sells call options on a weekly basis and reinvests the premium earned into the following week. Based on the full 3-year set of trading data from Deribit (a leading cryptocurrency options platform), the team derived a proprietary strike price selection algorithm that maximizes returns and minimizes the chance of taking a loss. A key differentiator for Flynt’s product is its use of leverage. Flynt uses up to 5 times leverage on their strategies to both increase the returns as well as decrease the chance of taking a loss by selecting a further OTM strike price. According to their backtests, this resulted in an average APR of 47%(including losses) compared…
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