Options data is incredibly rich, but notoriously difficult to interpret. For example, I can tell you that the bitcoin Dec19 $10k call is $222 bid at $393 on LedgerX (which it is). I was a former options trader at Goldman Sachs and I know that without a set of complex models, there is no easy intuition to be gained from those numbers.
Enter the LedgerX Oracle. The Oracle takes unique, real-time derivatives data that LedgerX produces and provides an approachable, intuitive way to interpret that data. It is directly inspired by both the theoretical computer science notion of an Oracle (where you can ask it a set of questions about a problem) as well as the bitcoin Oracle concept, which arbitrates settlement of smart contracts.
If this were a pitch to a Silicon Valley VC, I would say (with gusto) something along the lines of: "think Bloomberg meets WolframAlpha for Bitcoin data."
Let's explore how to talk to the Oracle. We can start with some basic commands. We deal in bitcoin around here, so let's see what bitcoin price is doing.
If this graph gets you feeling a bit down about bitcoin's price, we can add an argument to show it over a longer timeframe. Let's try 3 months.
graph btc 3m
Much better. Now we can move on to some LedgerX options data. Which options should we start with? Let's take a look at the large open LedgerX positions.
top open interest
Cool. You may wonder, though, what exactly is open interest? Well, there's a command for that! We can ask the Oracle for a description of open interest.
desc open interest
Alright, now on to the fun stuff. Let's see what LedgerX real-time option prices are implying about the future. We can ask the Oracle about the chance bitcoin will be above $10k at the end of the year.
chance btc above 10,000 dec 2019
These are real values backed out using a standard Black Scholes formulation. The beauty is you do not have to worry about any formulas at all. Not bad. But we can do one better. Let's find out the chance bitcoin "touches" $10k before the end of the year.
chance btc touches 10,000 dec 2019
Nice. What other events can we estimate the probability of? How about the chance that we end the year between $10k and $15k.
chance btc between 10,000 15,000 dec 2019
Try it out! Play around, ask the Oracle anything. This is a very early version, but the data is real and real-time. We'll be adding new commands and functionality on a weekly basis, giving you more ways to glean insight from the rich set of LedgerX options data.
Pretty neat, huh? A lot better than me telling you that the dec19 $10k call is $222 bid at $393.