Day 54 – Case Studies and Guest Insights: Top Traders and Institutions on Derive
Learn from the pros. Real-world lessons and strategies from advanced traders and institutions using Derive.
The best education often comes from seeing how others navigate the same tools and markets.
Today, we feature anonymized case studies and guest insights from professionals who trade and manage risk on Derive.
1. Case Study: Institutional Market Maker on BTC Options
Background:
A major institutional market maker provides two-sided liquidity on BTC options.
Approach:
Runs a systematic quoting algorithm for multiple strikes and expiries.
Delta hedges with perps and spot, using automated risk limits.
Monitors portfolio Greeks in real time and adjusts exposures dynamically.
Uses Derive’s API for low-latency order submission and adjustments.
Key Insight:
Automated risk management and fast execution are critical. Spreads and sizes are dynamically adjusted based on volatility and order flow.
2. Case Study: Yield Vault Operator
Background:
A vault manager structures covered call and put selling strategies for passive yield.
Approach:
Aggregates user funds and deploys systematic covered call writing.
Selects strikes with high implied volatility and low likelihood of assignment.
Rolls positions as expiry approaches or if market conditions shift.
Uses Derive analytics to track PnL and risk for the vault.
Key Insight:
Vault users value transparency. Automated reporting and clear performance data build trust and attract more capital.
3. Guest Insight: Pro Options Trader on ETH Volatility
Perspective:
“On Derive, I can track live IV and RV and execute both event-driven and structural trades. I focus on vol surfaces, skew, and use both straddles and iron condors before and after news-driven events.”
Key Lessons:
Monitor both implied and realized volatility to spot opportunity.
Use subaccounts to separate event trades from core strategies.
Manage risk tightly, adjust legs early if market conditions shift.
4. Case Study: Portfolio Hedge Using OTM Puts
Background:
A fund with large BTC and ETH spot holdings buys out-of-the-money puts for tail risk protection.
Approach:
Buys long-dated OTM puts as portfolio insurance.
Sizes the hedge relative to total risk and expected drawdowns.
Reviews and rolls hedges as market prices and exposures evolve.
Uses Derive’s export and analytics tools for reporting.
Key Insight:
Systematic insurance pays off over time. Skipping insurance saves on cost, but leaves you exposed to rare, severe losses.
5. Tips from the Top
Document your process and rationale for each trade.
Automate risk monitoring wherever possible.
Network with other pros to share insight and refine strategies.
Stay humble, review losses, and learn from others’ mistakes.
Your Action Today
Review your own trading approach and identify one new process, tool, or discipline from these case studies to try yourself.
Explore Derive’s analytics and automated workflows.
Reach out for guest suggestions or share your own experiences to be featured in future editions.
Tomorrow, we continue with live trading simulations: from idea to execution to review.
Hasta manana
Cpt