1. Market size: giants vs. growth stocks
If the global options market is like a fast food restaurant:
The US market is a 24-hour McDonald's, with an average of 40 million options traded per day
The Chinese market is a newly opened local hamburger restaurant with an average daily transaction volume of 5 million
Bitcoin options are like a corner convenience store, open 24/7, with an average daily trading volume of 2 million contracts
Pivot Data:
Tesla stock options have a daily maximum transaction volume of over 2 million lots, which is more than all A-share stock options combined.
The implied volatility of Bitcoin options has remained at 70%+ all year round (S&P 500 options are only 15%), which can be called "roller coaster insurance"
2. Trading rules: Liberals vs. Conservatives
1. Exercise Method
US stock options: American style (exercise at any time), like taking food at a buffet restaurant at any time Example : Apple's stock price soared during the trading session, and those who held call options immediately exercised their options to cash out
A-share options: European style (exercise upon expiration), like a private meal with reservations Example : 50ETF options can only be exercised on the fourth Wednesday of each month
Bitcoin options: a hybrid (both American and European, with European being the main option)
2. Circuit breaker mechanism
US stocks: Individual stocks that rise or fall by more than 5% will be suspended for 5 minutes, like a yellow traffic light
A-shares: Options prices rise or fall by more than 50% and the circuit breaker lasts for 3 minutes, like a sudden power outage
Bitcoin: No circuit breakers, but exchanges may unplug the network (refer to exchange outage incidents)
3. Leverage
Tesla options: actual leverage is about 5-10 times (premium vs. underlying market value)
Bitcoin options: up to 100x (the death temptation of alt-exchanges)
3. Player structure: institutional Shura field vs retail amusement park
US Market:
Market makers account for 60% of trading volume, with 300 orders per second
Hedge funds use options to perform "precision surgery" (such as Melvin Capital using put options to hedge GME losses)
Retail investors form groups to fight guerrilla warfare (WallStreetBets uses call options to squeeze out shorts)
Chinese Market:
Securities firms dominate proprietary trading, like a chef in a state-owned enterprise canteen holding a spoon
Private equity funds play "T+0" high-frequency arbitrage
Retail investors love to buy out-of-the-money options (the lottery mentality of betting 10 yuan on a million)
Bitcoin Market:
Miners use options to hedge electricity risk
South Korean middle-aged women are fighting against Wall Street quantitative funds
The exchange is both the referee and the kicker (FTX crash incident)
4. Special varieties: creative thinking vs. stability
American exotic options:
Weather Options (betting on the amount of snow in Chicago)
Election options (betting on presidential candidates' odds of winning)
Movie box office options (Can Avatar 2 break $2 billion?)
Chinese characteristic design:
Circuit breaker mechanism (trading suspended if price rises or falls by more than 50%)
Position limit system (new accounts can only have a maximum of 100 positions)
Level 3 investor threshold (500,000 yuan in funds + simulated trading + exam)
Bitcoin Magic Reality:
Perpetual options (no need to expire, just pay funding fee)
DeFi options (automatically executed with smart contracts, but can be emptied by hackers)
NFT options (insurance for bored apes to prevent price crashes)
5. Practical skills: Cross-market arbitrage manual
Strategy 1: Volatility Gap Hunting
When Bitcoin volatility drops below 60%, buy a straddle
Sell wide straddles when S&P 500 volatility (VIX) exceeds 30
Principle : Volatility is like a spring. If you push it down, it will rebound. If you push it up too high, it will shrink.
Strategy 2: Time difference arbitrage
At 3 a.m. EST (after the A-share market closes), use U.S. stock options to hedge A50 futures risk
Before the quarterly Bitcoin delivery date, use options to hedge spot positions
Case : Hedging the risk of Chinese concept stocks through Tesla options during the 2024 Spring Festival A-share market closure
Strategy 3: Capturing regulatory dividends
When China strictly controls cryptocurrencies, shorting Bitcoin options volatility
When the US SEC approved the Bitcoin ETF, it bought deep out-of-the-money call options
Warning : Don’t follow Justin Sun’s high-profile actions during policy sensitive periods
6. Next Issue Preview
Tomorrow we will dissect the four basic roles of options traders.
After-school tasks:
View Tesla option chain and compare premium differences at different strike prices
Log in to Deribit and calculate the implied volatility of Bitcoin options with a strike price of $31,000
Leave a message to share the biggest differences you have found in the Chinese and American options markets
