Delta’s Enhanced Yield Product to reduce trading risks for clients
Delta Exchange is a crypto derivatives platform that has been in the news recently for introducing a passive income generation feature. The feature, called ‘Enhanced Yield Product’, will simplify the trading of bitcoin and ether. Through the use of the feature, traders can buy or sell securities on a given date or before at a specified strike price. In the derivatives market, the strike price is defined as a set price for option owners to sell or buy underlying assets at. The Singapore-based platform said that the feature would simplify crypto exposure and not require investors to experiment with or learn complex options.
Pankaj Balani, the CEO of Delta Exchange, said that the feature would help investors to participate in complex options strategies without the need for executing them. He also stressed how the feature would result in high yields for investors without active management. If the strike price of an option being shorted is lesser than an asset’s price, users’ bitcoins will be automatically sold at the strike price. This will allow users to earn the difference.
When the option contract of a user expires and the strike price is greater than the asset price, the asset isn’t sold. As a result, users can steer clear of high-risk transactions and retain their assets. The fact that all this is automated is the best thing about the feature.
According to Delta Exchange CEO Balani, as options markets mature further, there is a general belief that for all traders, structured products will eventually become the viable option.