Options and Perpetual Contracts

Options Trading on Aevo

Aevo offers options trading for major cryptocurrencies, including Ethereum (ETH) and Bitcoin (BTC). Options are financial derivatives that give traders the right, but not the obligation, to buy or sell an asset at a specified price before a certain date. This flexibility makes options a powerful tool for hedging risks or speculating on price movements.

Key Features of Aevo Options

1. Variety of Options: Aevo provides a range of options with different strike prices and expiration dates, allowing traders to choose options that best fit their trading strategies.
2. ETH and BTC Options: The platform focuses on options for Ethereum and Bitcoin, the two leading cryptocurrencies by market capitalization.
3. Settlement Mechanism: Options on Aevo are settled on-chain, ensuring transparency and security through the use of smart contracts.
   Options trading on Aevo enables users to engage in strategies such as covered calls, protective puts, straddles, and strangles, offering versatility in managing portfolio risks and opportunities.

Perpetual Contracts on Aevo

Unlike traditional futures contracts, perpetual contracts do not have an expiry date. This allows traders to hold positions indefinitely, subject to periodic funding payments.

Features of Perpetual Contracts

1. No Expiry Date: Traders can maintain their positions without the need to roll over contracts, providing greater flexibility in managing long-term strategies.
2. Funding Rate Mechanism: Perpetual contracts employ a funding rate mechanism to ensure that the contract price closely tracks the spot price of the underlying asset. Traders pay or receive funding payments based on their position and the prevailing funding rate.
3. Major Cryptocurrencies: Aevo offers perpetual contracts for major cryptocurrencies such as Ethereum (ETH) and Bitcoin (BTC), catering to the high demand for leveraged trading in these assets.

Margin Frameworks

Aevo supports both standard and portfolio margin frameworks, providing traders with flexibility in managing their collateral and leverage.

Standard Margin

• Individual Position Collateralization: Each position must be fully collateralized according to predefined margin requirements. This approach ensures that traders have sufficient collateral to cover potential losses on individual trades.

Portfolio Margin

• Cross-Margining: This framework allows traders to use a single pool of collateral across multiple positions. By sharing collateral among different positions, traders can achieve greater capital efficiency and leverage.

Risk Management and Liquidations

Aevo incorporates robust risk management protocols to protect the platform and its users. These protocols include:

1. Automated Risk Checks: Continuous monitoring of positions and collateral ensures that all trades remain within the required margin limits.
2. Liquidation Mechanism: When a trader’s position falls below the margin threshold, the risk engine triggers an automatic liquidation. This involves selling the trader’s collateral to cover the outstanding liabilities, ensuring the platform remains solvent and other users are not adversely affected.

Trading Experience and User Interface

Aevo provides a user-friendly interface designed to cater to both novice and experienced traders. Key features include:

1. Intuitive Design: The trading interface is straightforward, allowing users to place orders, manage positions, and monitor market conditions with ease.
2. Advanced Charting Tools: Comprehensive charting tools and technical indicators help traders analyze market trends and make informed trading decisions.
3. Real-Time Data: Live market data and order book information ensure that traders have access to the latest information to execute their strategies effectively.

Highlights

• Aevo offers options trading for Ethereum and Bitcoin with various strike prices and expiration dates.
• Perpetual futures contracts on Aevo do not have an expiry date, allowing indefinite position holding.
• The platform supports both standard and portfolio margin frameworks for flexible collateral management.
• Robust risk management protocols and automated liquidations protect the platform and its users.
• Aevo’s user-friendly interface and advanced charting tools enhance the trading experience.