Early Unwind
Today, we are excited to announce that users can now early unwind their OTC positions to capitalise on the mark-to-market. Users will now be able to submit unwind requests to institutional market makers to profit from moves in spot prices or implied volatility. This will allow users to capitalise on market movements throughout the option lifespan instead of only being able to realise profit or loss when the option expires.
Trade Ideas
Aevo OTC is the first platform that allows users to have a seamless experience while executing on-chain and in size against institutional grade market makers.
We also created a Telegram channel to follow all our trade ideas on Altcoin options as well as all the exclusive discounts from other market players. You can join it at: https://t.me/AxesAevoOTC
One trade that we like at the moment is going long MKR Call Options for end of September. You can find the trade details below.
Trade Details
Underlyer: MKR
Expiry: 29 September 2023
Strike Price: $1350
Premium: 70 USDC (spot ref 1,140, ~90v)
Max Size: 1,000 MKR
Trade Rationale
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Last month, MKR passed the Smart Burn Engine proposal, effectively resuming the MKR buyback program using excess DAI, adding constant buying pressure
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Since allowing RWAs to be collateralised for the minting of DAI, DAI supply has been growing to reach a yearly high this past week thanks to DSR yield reaching 8%
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Higher DAI supply turns into high annualised profits and excess supply, which accrue to the MKR token through the Smart Burn Engine
- This week, MakerDAO hit a 2-year pinnacle with an annualized revenue of $165.4 million, driven by a surge in the DAI supply
Entry Point Analysis
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Implied Volatility is currently at its lowest point ever making options buying extremely cheap
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We have just seen a price correction across majors and alts and expect a rebound given MKR fundamentals remain very strong
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MKR currently exhibits a low correlation with majors, especially on the downside since any rate driven fall in Majors price would actually benefit MKR since RWA (mostly short-term treasuries) make ~60% of MKR revenue.
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We anticipate many catalysts around MakerDAO profits and DAI supply, as well as proposals such as:
- This AAVE proposal to accept sDAI as a collateral, which, if passed, should further DAI adoption: https://snapshot.org/#/aave.eth/proposal/0xb41600e3f74bfa520549106fee4d21e7f674c5a79fbf1f7ca16947563474a4d7
For a more detailed analysis, you can read: https://ouroborosresearch.substack.com/p/mkr-burn-baby-burn