Ladder Strategy Overview

Ladder Finance has total 6 strategies. Each strategy has different times of strength; therefore, traders will utilize a strategy that fits the market. Basically, trading on derivatives using options supports below categories.

Diversification option strategies

• Stable Option: Covered-Call

• Flat Market Specialized Option: Short Straddle

• Yield Maximization Options: Synthetic Position

Each strategy specializes in different market conditions and it may be exposed to different risks. Ladder Finance will orchestrate for creating the most stable model. The certain portion of fund from depositors are allocated to option category. Besides, Ladder Finance never uses only one strategy in all market circumstance. The strategy of options involves risk, and our goal is to generate higher returns than the current market rate. The remaining fund will be allocated to Quant strategies.

Quant Trading strategies

• Trend-Following Quant: Algorithm Trading

• Stable Profit Quant: Arbitrage

• Operating Quant: Professional Trader

All strategies are always possible to modify. It means that all strategy may not be utilized at the same time, and new strategy can be added by the market circumstance. In addition, some of strategies cannot be changed by the governance. This is because of the area is specialized by professional traders. For example, even subtle adjustments can bring a big difference in results. Professional staffs of Ladder Finance are always monitoring the situation. Furthermore, they rebalance hedges and positions against open risks according to the internal manual.

The strategy of the option is based on a crypto-localized Black & Scholes model which supports to develop several formulas of Ladder Finance. The volatility and predictable range of spreads is determined by Implied Volatility (IV). Besides, our team is also realized many liquidity shortages on DEXs or on-chain exchanges. Therefore, some strategies will send assets to the CEX for trading. And then, we publish a breakdown of the deposits and withdrawals for financial transparency by the end each strategy, or quarter.