Opportunity

Options are a highly popular financial instrument for hedging and speculation due to the convexity of payoffs and capped downsides. The market opportunity for launching SDX is significant, considering the potential for substantial growth in the crypto option sector. Here are some key points illustrating this opportunity:

1. US Equities Option Market Dominance: In 2021, the notional value of US equities options daily trading exceeded was 111% as great as US equity spot volume, highlighting the thriving options market in the traditional financial sector.

2. Crypto Options Market Potential: As of 2022, the notional value of crypto options trading made up only 4% of the spot volume, which represents a significant disparity compared to the US equities options market.

3. Room for Expansion: To achieve a similar level of notional value as the US equities options market, the annual crypto option volume would need to reach $10.7 trillion. This figure represents the vast market opportunity for SDX, as it demonstrates the potential scale of growth available within the crypto options industry.

SDX presents a lucrative market opportunity given the current underdeveloped state of the crypto options sector.