Hedging Against Trade Risks With Oddz Options DEX Integration

Aniel Essien
3 min readMay 19, 2022

The concept of options in the crypto market is Oddz's selling point. These options which are derivatives give their owners the right, but not the obligation, to buy (call options) or sell (put options)/her asset at a strike (agreed) price on/before a set date.

Options have been seen to be the most effective tools when it comes to hedging traders’ funds and guarding against significant losses. And Oddz Options DEX Integration goes further to minimize trading risk with its options.

How Does Oddz Options DEX Hedge Against Trading Risk?

We understand that the crypto market is extremely volatile; prices can suddenly go up and come down and this can constitute a lot of losses at the expense of traders.

For spots and futures trading, traders trade on speculation and if the market goes as they predicted, they profit, but if it doesn’t, they lose.

To guard against these unfortunate and tragic losses, Oddz came up with the concept of an Options DEX, where traders can purchase insurance against loss as an option smart contract while buying cryptocurrencies from the DEX.

Let’s say for instance you want to buy ETH with an intent to trade it on a market predicting a rise or a fall, Oddz Options DEX allows you to buy the ETH with an option smart contract that automatically locks the ETH and provides insurance so that if the market swings in the opposite direction of the trader’s prediction, the insurance will be used to salvage the loss. But if the market swings in favor of the trader’s prediction, he makes a profit.

Oddz Finance created this idea to foster a win-win situation and to cut down the level of losses traders suffer due to the volatility of the market.

With Oddz Options DEX Integration, a trader does not always have to buy the asset to leverage their position for the asset. He can purchase only the option to buy and sell it at a strike price.

Options DEX also uses the ATM put option to hedge against price decline that may cumulate in a loss. This put option means that a trader can buy an asset at a price and set the price he/she purchased it as the strike price. So, even if the price declines, the trader sells it at the price he bought it when the option's duration is met.

An example is if you bought AVAX at $100 and lock it as an option setting it to insure your $AVAX for the next 30 days and sell at a strike price of $100.

Not that getting an option will be charged asides from the price of the asset according to the number of days insured, this includes the premium and the transaction fees.

Let’s say you are charged $15 for 30 days with $100 AVAX, that is $115 in all. However, the price of your premium is negligible. You set your strike price at the price you bought your asset.

If the price of the AVAX goes up, then you can sell and make your profit, but let’s say it drops to $70, you can sell at $100 and get $30. Or, you can hold onto the $AVAX which is insured against the price fall while waiting for the price to rise past your strike price.

Why Trade with Odd Options DEX?

From the above explanations, you can derive some benefits from the DEX.

However, simply put, traders’ funds are preserved. If the price moves in favor of them, they profit and if it moves against them, it is insured against loss.

About Oddz Finance

Oddz is a multi-chain derivative/options trading DEX partnering with popular chains such as Ethereum, BSC, Polygon, and Avalanche.

Trading options on Oddz DEX enables you to leverage options trading and make bountiful profits in a highly volatile market.

Join the Oddz community:

Instagram | Telegram Chat | Telegram Announcements | Twitter | Website |Discord

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Aniel Essien

A realist | a Blockchain Enthusiast | iWriteCoolShit