How Bitcoin Derivatives Work with Juthica Chou - WBD366

Mr Obnoxious

Peter McCormack

Technology, News, Politics, Money, Investing, Finance, Bitcoin

4.8 • 2.7K Ratings

🗓️ 30 June 2021

⏱️ 66 minutes

🔗️ Recording | iTunes | RSS

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Summary

Location: Remotely
Date: Tuesday 22nd June
Project: Kraken
Role: Head of OTC Options Trading

Derivatives are contracts that allow traders to take a position with an asset based on possible outcomes; while they can provide dramatic rewards, they come with risk.

Derivative exchanges have been a growing part of the maturing bitcoin ecosystem. However, with the rise of exchanges like FTX and Binance, offering high leverage, there is an increasing lens on these exchanges.

Derivative contracts are a valuable tool for experienced traders. With exchanges offering leverage of up to 125x, inexperienced traders can quickly amass significant losses.

Whenever bitcoin has a sharp move in either direction, those on the wrong side of the trade often get liquidated. These capitulation events regularly wipe out hundreds of millions or even billions of dollars in positions.

Some people suggest that high amounts of leverage are detrimental to the price discovery of bitcoin, but it's clear from the rise of certain exchanges that these are the types of markets traders want.

In this interview, I talk to Juthica Chou, Head of OTC Options Trading at Kraken. We discuss how bitcoin derivatives work, the different types of contracts, and Microstrategy's leverage plays.

Transcript

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0:00.0	You need to be able to withstand the fluctuations because I think one of the biggest dangers of leverage is that you get closed out at precisely the wrong time.
0:11.0	If you're short and Bitcoin rips up, you get closed out.
0:15.0	The whole walls coming home. It's coming home.
0:20.0	It's coming home. It's coming.
0:22.0	It's coming home. Coming.
0:26.0	Hello there from Bedford.
0:27.6	You might hear, I've got a croaky voice.
0:29.5	Sorry, I'm losing my voice.
0:31.7	As some of you know, England played Germany last night and I was lucky enough to be at
0:35.2	Wembley to see the game and what a night of football. We smashed them too now and football is obviously coming home.
0:42.0	Finally football is coming home. Finally, football is coming home.
0:44.6	Now listen, I know you don't all love football,
0:46.1	but I do.
0:47.3	I've had to suffer 30 years of Germany
0:49.6	knocking us out of tournaments,
0:51.2	so I'm going to have this moment.
0:52.4	I'm going to celebrate is a big deal for me.
0:54.5	But listen as football fans we are won so can we please have a moment of silence for
0:59.6	Scottish football? Anyway welcome to the what big football. Peter McCormack and today I've got an interview with Jessica Chow where she
1:13.9	attempts to explain Bitcoin derivatives for me but before that I do have a message from
1:18.5	my show sponsors and first up today we have Karsa the safest way to store your Bitcoin. Now forgotten
1:24.0	passwords, sim swaps, fishing attacks, there are all too many ways for you to have your
	...

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