Note: Nothing expressed below should be considered financial advice. This is just a suggestion so that users can learn more about the trading strategy. Users are always encouraged to do as much research as possible before executing any trade. The information below is not intended to represent guaranteed returns, and BitMEX will not be liable if your trades do not perform as expected.
Making money from cryptocurrencies, especially derivatives, is not always simple. That's why we've launched “BitMEX Alpha,” a series where we share trading secrets about potentially profitable opportunities on BitMEX.
Bitcoin gave back some gains after hitting record highs and consolidating near the 66,000 level, while funding rates calmed down. Therefore, this week on BitMEX Alpha, we will focus on trading opportunities for RBNUSDT and AEVOOUSDT.
RBN and AEVO convergence opportunity
Ribbon Finance (RBN) is the governance token of Ribbon Finance, one of the first and largest DOV protocols offering a variety of structured products, developed two years ago. AEVO (Aevo) is the governance token of Aevo, a CLOB decentralized exchange focused on options and perpetual trading built by the same team as Ribbon Finance.
Since launching AEVO in March, the token has made significant gains and hit an all-time high of 3.8572 last week. AEVOUSDT Contract).
As voted on by the Ribbon Finance community (see: here), RBN tokens can be converted to AEVO 1:1. May 15, 2024 (see here), which means that the prices of RBN and AEVO should converge on the day when conversion becomes possible. Where is RBN currently trading? It is currently trading at around 1.6. RBNUSDT contract (at the time of writing).
What's on the table?
RBN and AEVO will eventually transition 1:1. As of this writing, the prices it is trading at are:
|
contract |
price |
funding rate |
|
RBNUSDT |
1.6922 |
0.01% |
|
AEVOUSDT |
3.1451 |
0.01% |
How do you execute on an opportunity?
|
script |
step |
|
RBN expected to trade higher to meet AEVO price (BitMEX Alpha’s opinion) |
|
|
Expect AEVO to trade lower to meet RBN's price |
|
|
RBN/AEVO price is expected to trade between current market prices. |
|
What is the profit potential?
The profit/loss potential is uncertain as it depends on the market price of RBN and AEVO when the conversion is activated. Remember that for strategies involving short-term AEVOUSDT / RBNUSDT, you will also receive funding payments (0.01% every 8 hours according to the current funding rate).
What should I consider?
- Exit and entry costs (e.g. trading fees and slippage) for both trades.
- Since this trading opportunity is not hedged, it can result in potential losses and negative PnL if the price outcome of both tokens is not in line with your strategy.
- Considering that both RBNUSDT and AEVOUSDT can trade up to 10x, there is a risk of liquidation.
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