PRESS RELEASE. Flynt Finance, the cryptocurrency financial services company based in Singapore co-founded by previous derivatives exchange operators and analysts, launched a platform for crypto structured products last week. The relatively high returns (up to 50% APY) on Flynt has gained strong interest from crypto yield enthusiasts, especially during the bear market where volatility is harder to come by.
Cryptocurrency markets are often thought of as the go-to place for high-risk high-return due to the volatile price movements. Managing risk for such assets can be complex, especially for those that do not have a financial background.
A popular way to hedge is to use options by entering into positions opposite to current asset holding. For example, holding spot bitcoin and buying a put option when you expect some downward price action. Although still a nascent field compared to perpetual futures, crypto options are a great way to hedge your volatile positions both during times of chop and strong trends.
There are also various structured products that provide yield with combined strategies of options, lending, and futures. One of the simplest and most popular structured products is the covered call strategy or a cash covered put strategy. Even the legendary Warren Buffet has famously used this to earn premiums on Coca-Cola stocks.
Since 2021 there has been a rush to offer covered call strategies on various cryptocurrencies for the yield-hungry crypto investors. These strategies have been growing rapidly since their inception and have held up surprisingly well during the more recent downturn.
After rigorous research and backtesting various strategies, the team at Flynt decided to launch their very own structured product strategy, the “BTC Covered Call Strategy x5”. This strategy sells call options on a weekly basis and reinvests the premium earned into the following week. Based on the full 3-year set of trading data from Deribit (a leading cryptocurrency options platform), the team derived a proprietary strike price selection algorithm that maximizes returns and minimizes the chance of taking a loss. A key differentiator for Flynt’s product is its use of leverage. Flynt uses up to 5 times leverage on their strategies to both increase the returns as well as decrease the chance of taking a loss by selecting a further OTM strike price. According to their backtests, this resulted in an average APR of 47%(including losses) compared to the industry average of about 15%(not including losses).
David Seo, CEO of Flynt Finance mentions that “for most people, a non-leveraged covered call strategy should be just fine, but for those that would like to take more risk for higher returns should definitely give Flynt a try. Through Flynt, we aim to provide access to crypto investment strategies for a variety of risk profiles.”
About Flynt Finance and the Team
Flynt Finance is a one-stop asset management platform that provides structured products on cryptocurrencies. The team is made up of blockchain OGs that have experience delivering a wide range of services including cryptocurrency exchanges, blockchain protocols, and dApps together since 2015. Flynt’s CEO, David Seo was the COO of a leading South Korean exchange, and Victor Park, the CTO has been building robust stock and cryptocurrency trading platforms for the past 20 years. Other core members have extensive experience in various fields including financial big data modeling, asset custody services, derivatives trading, and trading structured products.
Flynt’s team began the new initiative with a bold mission to provide financial freedom to everyone regardless of geography, technology, and privilege.
To ensure transparent communication to the clients on how the deposited funds are used, every strategy executed by the team can be found on Flynt’s website in detail.
Currently providing bitcoin covered-call strategies that generate up to 50% APY, Flynt plans to continue to meet the needs of the ever-evolving crypto investor through innovative products.