“In digital assets, derivatives enable both risk management and alpha generation” – Chris Sullivan

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🗓️ 6th Annual Beryl Elites Alternative Investment & Data Revolution – Thought Leadership Conference. Immerse yourself in 18 dynamic panels featuring 85 esteemed speakers from top financial, investment, and technology companies.

PANEL – Increasing Sophistication in Digital Assets and the Emergence of Derivatives: The financial landscape for digital assets is becoming increasingly sophisticated, with advanced financial instruments and investment strategies gaining prominence. Progression of digital asset trading, emphasizing the emergence and expansion of derivatives within this sector.

Discover intricacies of digital assets, its future, and more. Get the answers from our expert panelists featuring:

Moderator
Patrick Corker Head of Strategy, Lukka
Speakers:
Robert Strebel Head of Relationship Management, DRW
Christopher Perkins, President, CoinFund
Chris Sullivan, Principal & Portfolio Management, Hyperion Decimus
Andrew Baehr, CFA CFA, Head of CoinDesk Indices, CoinDesk

How to Deploy Derivatives to Manage Risks in Digital Assets – Chris Sullivan, Hyperion Decimus

Transcript: So risk management, which I think is a really important topic in an asset class, meaning digital assets more broadly, where risk and how to manage that risk, most people think of it as volatility, although that’s just one dimension of it, can be managed, right? So it is possible to invest in this asset class and still manage the risk. Derivatives is a big part of that. I think in digital assets, maybe a little unlike fixed income derivatives and equity derivatives, you can accomplish two expressions of two different theses with the structures. They can be risk managed, but they can also be a source of alpha. And unlike equities, the skew is to the call side, to Andy’s point. And so the other side from OGs like all of us sitting here, I don’t want to ever sell my Bitcoin, right?

So how am I going to control the vol for the RLPs when there’s only 21 million of this? Trying to profit take and create a zillion tax instances which our algos do is one thing but on our net long position I don’t want to get rid of that so how do I delta gamma vega hedge? And it’s a new newer market to which CoinDesk 20 has been probably one of the most successful indexes, I think ever. Then our work with Cumberland we do some pretty dynamic structures taking advantage of premiums across different vintages. There’s a kink in the November contracts right now. So you can do a combo of risk management and alpha across pretty much going out two, three years.

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