TL;DR

🚀 September Highlights:

• Paradex: Recorded $1.4B traded and introduced AAVE & FLOW markets.
• Paradigm: Options market share grew to 27% in September, despite lower overall volumes, with $11.1B traded. Notably, SOL block options volume saw a significant increase.

Q3 Wrap

September wrapped up Q3 with lighter volumes as Paradigm traded $11.1B and Paradex traded $1.4B. Notwithstanding decreased activity at the margin, Paradigm market share increased to 27% and Paradex market share increased to 1.8%. Once again, the month began with a downturn, followed by a gradual recovery, with volatilities bleeding lower. We will recap market catalysts and key options flows thoroughly in the Markets section.

Paradex Key Performance Metrics

In the past month, Paradex recorded a Monthly ADV of $46M, with a Monthly Total Volume of $1.4B. Total fees paid amounted to $353K, while we maintained 290 active users. The Total Average Open Interest was at $18.8M, contributing to a Monthly TVL of $13.7M. Additionally, traders earned a total of 8M points.

New Market Listings

This month, we slowed down on new market listings to focus on rolling out some exciting new features for our users. That said, we still added two fresh markets, pushing us closer to our 100-market target by year’s end. New additions:

• AAVE-USD-PERP
• FLOW-USD-PERP

Macro takes the wheel

Call skew remained in longer tenors. Spot prices then gradually recovered throughout September. Employment and inflation data supported the soft-landing narrative, corroborated by the FOMC policy decision alongside their economic projections. Vols drifted lower, reversing briefly in the lead up to the FOMC meeting (Chart 2). Substantial spot ETFs inflows were also an important tailwind in the final week of September. As markets rallied towards the end of the month with BTC closing +7%, October speculative flows came in with call buyers and iron condor buys. Flows below:

1. 841x 25-Oct-24 77000/84000 Call Spread bought
2. 840x 75000 25-Oct-24/ 29-Nov-24 100000 Call Calendar Sold
3. 805x 27-Sep-24 65000 Call bought
4. 675x 25-Oct-24 70000 Call sold
5. 650x ICondor 25-Oct-24 58000/60000/70000/72000 bought

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ETH ETF inflows remained negligible throughout early September. However, ETH saw its third-largest inflow day on September 25th and had a relatively stronger week alongside BTC inflows. With elections approaching in early November, the options term structure shows a noticeable kink (Chart 3). ETH ATM IVs jump from 56% to 64% for the 8th of November expiry, before flattening out thereafter.

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September ETH flows on Paradigm reflect a blend of bullish and neutral positioning. Significant buying interest in call spreads and outright calls suggests optimism for ETH price appreciation towards year-end. The largest trade is a 34,500-lot December call spread, signaling a bullish outlook with a target of $3,000.

Top 10 ETH Structures on Paradigm:‍

34500x 27-Dec-24 2400/3000 Call Spread bought
9250x 27-Sep-24 2400 Call sold
7500x 4-Oct-24 2900 Call bought
7250x 20-Sep-24 2300 Call sold
6750x 25-Oct-24 3000 Call bought
6000x 27-Dec-24 5000 28-Mar-25 6000 Call Calendar sold
6000x 27-Sep-24 2600 Call bought
5625x 11-Oct-24 2550 Straddle sold
5500x 27-Sep-24 2700 Call bought
5250x 25-Oct-24 2600 Straddle sold

SOL upside continued to be lifted. Although the SOL options market is still underdeveloped compared to majors, liquidity is increasing (Chart 4). The majority of flows were buyers of outright calls.

Top 5 SOL Structures on Paradigm:‍

30000x 27-Sep-24 160 Call bought
27500x 27-Sep-24 150 Call bought
17500x 25-Oct-24 170 Call bought
10000x 4-Oct-24 170 Call bought
10000x 27-Sep-24 140 Call bought

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Stay informed and engaged with us through "Paradigm Edge" and "Paradex" Telegram channels — your go-to resources for navigating this ever-changing crypto derivatives landscape.

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The Paradigm Team 💜