OKX exclusively launches Yield Hunter, which may lead to significant growth for crypto options users

For most users, understanding options products is difficult, and no matter how good they are, they won't be used.

As an effective hedging tool, options can help users lock in maximum risk and pursue higher profits. They have a very wide range of institutional and professional users in traditional finance, but in the relatively early stage of the cryptocurrency industry, they still need to scale up and improve liquidity. Currently, there are many non-financial professional users in the cryptocurrency industry, and the non-linear yield curve characteristics of options, as well as the more specialized pricing models, lead to a high trading threshold that cannot meet their needs.

To address the above pain points, on November 15, OKX announced the launch of a new product based on options called the Yield Hunter. The overall style of the product reduces the user's understanding threshold through simple and clear graphical yield curves; in terms of trading experience, it simplifies the order process for options sellers and displays yields in annualized form, lowering the participation threshold for users, allowing novice users to easily earn high annualized returns.

In simple terms, OKX Yield Hunter is as easy as a financial product, allowing users to easily participate in options in the future. The launch of OKX Yield Hunter lowers the participation threshold for cryptocurrency options products and will bring in more new users.

Brief Analysis of OKX Yield Hunter

OKX Yield Hunter is a non-principal-protected trading product that helps users achieve higher annualized returns, built on the basis of selling options. When users invest in Yield Hunter, they receive premiums from selling option contracts, and their returns depend on the relationship between the expiration price and the target price. Users can choose between two products: earn if it doesn't rise or earn if it doesn't fall, based on their market judgment.

For example, for options products based on BTC and ETH, there are options like BTC earn if it doesn't rise, BTC earn if it doesn't fall, ETH earn if it doesn't rise, and ETH earn if it doesn't fall. Users can choose the investment product that suits them, and after successfully placing an order, they can hold until expiration for settlement or close early.

In terms of product returns, OKX Yield Hunter presents estimated annualized interest rates, making returns clear at a glance. In terms of participation format, it allows users to invest USDT to earn USDT or invest coins to earn coins, eliminating the cumbersome exchange process. In terms of product selection, users can flexibly choose the target price range, expiration date, and yield rate, making it very flexible. Additionally, it offers 1-X leverage to enhance capital utilization, among other features.

Through OKX Yield Hunter, users who do not have the ability to construct multi-leg options asset combinations to achieve yield targets, who are unclear about options pricing and yield characteristics, or who do not know how to choose options can easily participate. OKX lowers the participation threshold for users from multiple aspects, such as understanding and participation, greatly enhancing convenience and operational experience.

Moreover, it is worth noting that OKX Yield Hunter not only significantly reduces the participation threshold for options products in terms of product experience but also provides users with relatively high annualized returns. Although it is not principal-protected, the estimated annualized interest rate displayed by the product is higher than that of general financial products. How is this achieved?

To answer this question, one must first have a simple understanding of options.

Understanding Options in One Picture

Options are a type of choice, which gives the right to buy or sell a specific commodity at a specific price at a specific time in the future.

There are many options strategies, such as call options, put options, bull spreads & bear spreads, etc. Most of these seemingly complex and obscure options are essentially composed of very ordinary single strategies. Single strategies can be bullish or bearish and mainly include: buying call options, buying put options, selling call options, and selling put options.

Let’s analyze the four types of single strategies and their risks and returns using the following sketch. The horizontal axis represents the underlying price, and the vertical axis represents returns. A is the strike price, and P is the premium. For example, if Zhang San buys a BTC call option with a strike price of A for a premium of P, it means that at expiration, Zhang San has the right to buy BTC at price A.

If the price of BTC at expiration is greater than A, then theoretically, the profit is unlimited as BTC rises. However, considering the premium P as the cost, Zhang San can only start making a profit when the price of BTC at expiration is greater than A + P. Regardless of how much it rises, buying BTC at price A will always be profitable for Zhang San, so he can exercise the option. If the price of BTC at expiration is less than A, then theoretically, the loss is unlimited as BTC falls. However, Zhang San can choose to forgo exercising the right to buy BTC at price A, thus only losing the premium P, which limits the loss. The same logic applies to other strategies.

OKX Yield Hunter is fundamentally built on selling options. As shown in the above diagram, the selling type of options under single strategies includes selling call options and selling put options. Selling a call option means losing money if the price of BTC rises, but earning the premium P if it does not rise; selling a put option means losing money if the price of BTC falls, but earning the premium P if it does not fall.

Although selling options is likely to earn the premium P, the premium P (option price) is determined by multiple factors, including the price of the underlying asset, the strike price, the volatility of the underlying asset, the remaining time, and interest rates. These factors can affect the value and trading price of the options. For example, considering the limited loss and unlimited profit characteristics of options, if the volatility of the underlying price is greater, the correct direction yields higher returns, while the wrong direction keeps the returns controllable, thus the higher the volatility, the greater the value.

Currently, there are many options strategies in the market that can be applied to various market conditions through diversified combinations and calculations, even achieving profits under the premise of principal protection. This is why OKX Yield Hunter is a non-principal-protected trading product that helps users achieve higher annualized returns.

OKX Creates a Simplified Trading Tool

Options and futures, as derivative tools, have functions such as risk management, price discovery, and asset allocation. However, compared to futures, options can be combined into diverse strategies, allowing for pre-calculated risks.

However, for many users in the cryptocurrency industry who are accustomed to spot or contract products, the threshold for getting started with options products is relatively high. Through OKX Yield Hunter, users are provided with an extremely convenient and effective hedging tool, which will promote the popularity of options products in the cryptocurrency industry.

Currently, OKX's financial products are leading in the industry, becoming the preferred tool for users to hedge risks and earn stable returns during nearly two years of bear market conditions.

Looking at OKX's financial products, whether it is the current Yield Hunter or previously launched products like Dual Currency Win and Shark Fin, they are continuously innovating to simplify trading tools, lowering the user threshold, and providing exceptional trading services.

After all, "Simplicity is the ultimate sophistication; because it is simple, it is efficient."