Capital Efficiency Improvements with Combo Options

What are Combo Options?

  • Combo Options employ strategies to execute several options trades simultaneously, designed to reduce capital requirements and operational costs as much as 99% for both traders and liquidity providers

  • This approach strategically merges different options positions to not only optimize the risk-reward balance but also substantially enhance tradersโ€™ leverage

How can Combo Options Improve Capital Efficiency?

  • For traders to buy options, Combo Options can render significantly higher leverage, effectively enabling more dynamic trading strategies with reduced risk

  • For traders to sell options, Combo Options can take a sell position with small collateral

  • For LPs, their liquidity pools would be able to supply increased liquidity with less capital due to the lower collateral and reduced risk associated with Combo Options

  • In essence, Combo Options would enhance capital efficiency for both traders and LPs, supporting the development of more versatile and effective trading strategies with diminished risk exposure

  • Combo Options have a smaller impact on the OLP's Greeks compared to vanilla options, resulting in more advantageous spreads for traders โ€” this is attributed to Moby's Dynamic Risk Premium model, which calculates the Risk Premium (Spread) according to the influence of an option position on the OLP's Greeks

Trade Combo Options on Moby

  • Currently, Moby offers "Call Spread" and "Put Spread" Combo Options, which allow users to trade call or put options that exhibit identical expiration but with different strike prices

  • Moby plans to offer a wider variety of Combo Options to present diversified trading strategies for traders and improve capital efficiency for LPs

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