DETAILED ARBITRAGE for Crypto OPTIONS Walkthrough | Exploring Put Call Parity

If you would like to profit from mis-pricing across the Deribit and Delta Options Exchanges in Crypto or just want to figure out how to find pricing gaps to exploit as an options trader, then this is a video you do not want to miss.
In this tutorial, I walk you through the calculation live with a real-world opportunity unfolding before out eyes - but we have to move fast - the markets won't wait for us.
Put-call-parity is an equation which allows us to determine whether or not there is a valid arbitrage opportunity. In doing so, we can determine whether or not an exchange (or two exchanges in our case) are presenting us with a net opportunity for arbitrage on the options chains.
Code download: coderaiders.com/site/view?pkg...
Website: cryptowizards.net

[@leonyeh]

Yes, it is getting better and better every day. Shaun, Thank you for sharing the code and knowledge.

[@CryptoWizards]

Leon! You’re keeping me going brother. Thank you!

[@jacquesdurand4416]

Was literary working on this today !!! One sticky point is to remember that on deribit, delta and okx , is that the options are coin settled, versus something like Bybit options which is USDC Settled.

[@CryptoWizards]

Excellent point!!!

[@MrPotatoHeadFX]

Such a good video!

[@CryptoWizards]

Thanks! Couldn’t wait to make this one.

[@stavb9400]

Sorry i havent used options but my question is when u sell the call option , do you have to buy that contract back later or the exchange just requires u to have a sufficient number of coins as collateral ? I.e. can you Sell and Options contract if you don't own one ?

[@-IsleOfSkye-]

So we need to have money for it. We can't use flash loan?

[@fruwnomsa7830]

I literally don't understand almost anything :( Do I have to make 3 bets in total to make the arbitrage? How much should I bet on put, call, and long futures? I have done arbitrage in sports but I am not very clear on how to do this type of arbitrage.

[@walterwangsyd]

deribit settled in BTC, you need hedge BTC price if you doing this (to prevent BTC price dump ), and if you hedge, you pay extra fees, and if the option settled date too far, you may need to pay funding fee (yes you need to pay funding because if BTC price drop a lot , the funding will be negative)

[@CryptoWizards]

Thanks Walter. Was wondering if over the law of large numbers (enough trades), this would wash both ways?

[@walterwangsyd]

@@CryptoWizards no matter what direction you trade option on deribt, you always only have one direction which is short BTC perp (or delivery) contract to hedge your btc asset on deribit. because your asset is spot BTC on deribit . If you hold any spot BTC, to be delta neutral, you need short the same amount of your BTC spot. So the law of large number doesn't apply here. However, Bybit has USDC based option which can be used to arb with delta.exchange. But almost no chance due to Bybit USDC option bid ask tooooo wide.

[@WilliamBrown-ug1hv]

5thScape needs to deliver or they'll lose my confidence 😬

[@AllJokesAsideBenKirby]

Any chance you could do another video on flashloan/flashswaps for Pancakeswap and expand on the Triangular-Flash course? Especially when it comes to finding arbitrage opportunities

[@CryptoWizards]

For sure. New FlashLoan code in the works. The problem is finding the opportunities to test them against but getting there.

[@AllJokesAsideBenKirby]

Awesome, looking forward to it

[@snapo1750]

In my view (my noobie humble opinnion) it is much more profitable to arbitrage away the diff in volatility between eth and btc.... Buy Call/Put at same strike for BTC (sample 5k USD) Sell Call/Put at the same offset in ETH (exactly the same ammount in USD) As ETH is the more volatile asset the premium you get is higher, on deribit there is also a swap option, so to always keep liquidity you can swap BTC and ETH to keep liquid and dont get margin called. I am doing this since deribit added the swap feature... it works like a dream but i dont have enough fiat to do it in size, thats why i say it. because there is still a 10% vol gap

[@CryptoWizards]

You don't sound like a noobie, you sound more like a seasoned pro. Keep the comments coming!

[@apeaperino]

Hi @snapo1750, I've been trying to understand your example but I have to be missing something.

[@Pawsomely_Cute]

could you put one trade down here with numbers in details as an example?

[@snapo1750]

@@Pawsomely_Cute since i posted this, the voltatility between both have disapeared :-( , before i posted this BTC had a volatility of 63, ETH had 73. Now its 64/65 and no longer profitable (at least with my fees and the spread). You can get the historical data from deribit and you will see before my post there was ALWAYS a diff higher than 10+ . I learned something, never give away something that works for you 🙂

[@mattj368]

If you find an edge and need capital maybe we could come to an agreement that would benefit us both. Email is in my about section if you're interested.

[@marksukhinin7622]

This man is giving out gold, someone's gotta stop him 😅

[@CryptoWizards]

Lol! It’s my biggest fear. I’ve been warned once before 😅

[@crypt0xyc]

nice work and very good explanations! However, I could not help but notice that there was a much easier arbitrage to be done at the time when you recorded the video. Looking at your screenshare here kzbin.info/www/bejne/ppKWqIF4rsSkiJo (and 5 seconds later on Deribit), it is obvious that there is a huge spread from Deribit to Delta Exchange even for outright arbitrage. You could have bought the 21500 call on Deribit for around 139$ and immediately sold the same strike on Delta for 168.5$, securing almost 30$ gross profit with much less fees than if you used the put-call parity involving futures or spot in addition.