April 6, 2023

Desk Commentary - Waiting Room

In a static Tuesday & Wednesday tape for BTC the crypto vol markets saw a stealthy spate of action in 2-3 day expiries, wingier strikes and longer dated tenors as ETH broke to fresh cycle highs before a flaccid if orderly retracement after mid-week.

In that context, December 50 deltas caught a quiet bid as New York walked in on Tuesday with ether and bitcoin IVs firming in sync just ahead of the 60% level. As they did so, basis out the curve marked up simultaneously suggesting both delta and vega covering. And although May / Dec bitcoin call calendar blocks were RFQ’d in succession Tuesday morning, granting some measure of offsetting supply, equilibrium was not found until the afternoon by which point delta neural straddle premiums settled nearly 50 basis points higher and spot-Dec basis closed in on $600.

In terms of wings, throughout Tuesday, ETH options markets saw persistent RFQs to sell Sep 50 deltas vs buying quarter delta calls, along with an incentivized appetite to bid size 5 delta same tenor calls just 5 bps off mids. BTC by comparison saw size May 1×2, 1×3, and 1×4 convexity spreads RFQ’d before 800 units of 30k-45k ratios went through 2 bps off mids.

Wednesday’s session saw a moderation of those flows for bitcoin with demand for vega easing and gamma sellers prevailing as a local gamma sink at 28,000 looked to take hold, while ETH dynamics were more aspirational with steady buyers of 1wk to 1month quarter delta upside risk in greater than 20,000 units as the market eyed chances for a breakout. But it was not to be: with all eyes on this week’s Good Friday NFP and a strong Caixin in China, the weight of successive releases of leading economic indicators in the current data dependent policy regime, particularly insofar as the Fed is concerned, appears to have tempered market enthusiasm, at least temporarily, to push towards the critical levels of 30,000 BTC and 2,000 ETH, until a more explosive catalyst for the next leg in the time series of returns for the asset class is found.

Written By

Gordan Grant

Managing Director, Trading and Sales


Genesis Global Trading, Inc. and its global affiliates (collectively, “Genesis”) do not provide legal, compliance, tax or accounting advice. Genesis is a principal trading firm; it is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing this material, which cannot be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The information contained herein has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances, or requirements of any person, and it should not be the basis for making any investment or transaction decision. THE INFORMATION IS NEITHER A RECOMMENDATION TO ENGAGE IN ANY TRANSACTION NOR RESEARCH MATERIAL.

This material contained herein is confidential and may not be distributed in whole or in part to anyone other than the intended recipients. Unauthorized reproduction or distribution of all or any of this material or the information contained herein is strictly prohibited. These materials are incomplete without reference to, and should be viewed solely in conjunction with, the terms and disclosures set forth on the Genesis website, which are deemed incorporated herein.

The information provided in this communication does not constitute investment advice, financial advice, trading advice, or other advice. If any person elects to enter into transactions with Genesis, whether as a result of this material or otherwise, Genesis will enter into such transactions as principal only and will act solely in its own best interests, which may be adverse to your interests. Therefore, you are advised to make your own assessment of whether a Genesis service that you are considering is suitable for you and ensure that you have the necessary experience and knowledge to understand the risks involved in relation to those particular services, transactions or investments. Prior to entering into any transaction, you should determine, without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal, tax and accounting characterizations and consequences. In this regard, by accepting this material, you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal, tax or accounting advice, (b) there may be legal, tax or accounting risks associated with any transaction, (c) you should receive (and rely on) separate and qualified legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal, tax and accounting advice and our disclaimer as to these matters. By accepting receipt of this material, the recipient will be deemed to represent that they possess, either individually or through their advisers, sufficient investment expertise to understand the risks involved in any transactions or services discussed herein and that they have not relied in whole or in part on any of the information provided by Genesis in making such determination.

The trading of digital currency as herein described is an inherently risky activity. Digital currency does not benefit from the protections afforded by the Securities Investor Protection Corporation. A counterparty’s ability to enter into derivatives with Genesis depends on satisfying a number of regulatory requirements imposed on derivatives under the Dodd–Frank Wall Street Reform and Consumer Protection Act and applicable law.

Any prices or levels contained herein are preliminary and indicative only and do not represent bids or offers. These indications are provided solely for your information and consideration, are subject to change at any time without notice and are not intended as an offer to sell or a solicitation to purchase any financial instrument. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency rate or other market or economic measure. In preparing this material, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. Genesis does not make any representations or warranties, express or implied, as to the accuracy or completeness of the information provided herein. Any estimates included herein constitute our judgment as of the date hereof, are subject to change, may or may not be realized, and are not a complete analysis of every material fact. We and/or our affiliates may make a market in these instruments for our customers and for our own account. Accordingly, Genesis may have a position in any such instrument at any time.

Genesis and Genesis Trading are marketing names for certain businesses of Genesis Global Trading, Inc. and its global affiliates and if and as used herein may include as applicable employees or officers of any or all of such entities irrespective of the marketing name used. Products and services may not be available to all counterparties or in all jurisdictions. Securities and digital assets are not deposits or other obligations of any commercial bank, are not guaranteed by any commercial bank and are not insured by the Federal Deposit Insurance Corporation. GGC International Limited is incorporated in the British Virgin Islands (“BVI”). Genesis Global Trading, Inc, a Delaware corporation, has been granted a Virtual Currency License by the New York State Department of Financial Services and is registered with the U.S. Securities and Exchange Commission as a broker dealer. Genesis Asia Pacific Pte. Ltd. Is a private limited company organized under the laws of Singapore. Genesis Global Capital, LLC is a limited liability company organized under the laws of Delaware. Genesis Custody Limited is registered as a cryptoasset business with the UK Financial Conduct Authority.

Market Insights

Sign up for crypto market analysis from the Genesis team.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Market reviews subscription sculpture