Tulip King options vs perps analysis
작성: Tufail: Polymarket
Tulip King draws a hard line between perps and options, arguing that the two are fundamentally separate assets with different return profiles rather than competitors. A perp is just a multiplier on a linear return; do 10x leverage on a 10% return and you get your 100% return, but that's all it is. Options possess convexity instead, which means if an out-of-the-money position starts moving into the money, the returns become exponentially positive. That mathematical property is why sophisticated participants use options to structure novel payout profiles based on opinions about asset relationships or strikes. You can hedge positions or sell options to collect premium, building specific financial outcomes that perps simply cannot replicate. Since options literally have a different return profile than perps, they remain distinct financial products. There is no world where perps eats into all of the options market because the utility of convexity ensures their continued relevance. #Polymarket
스크립트 (en)
A perp is just a multiplier on like a linear return, right? So if I do 10x leverage on a 10% return, there's my 100% return, right? It's just a multiplier, right? Options have convexity, right? So if I buy an out-of-the-money option on something and it starts to come into the money, I get an exponential positive return as it starts to come into the money, right? So the real reason like sophisticated people use options is they're like you can use the convexity one to just structure novel payouts. If you have like an opinion on the relationship between certain assets or certain strikes and prices or whatever, you can construct like novel financial payouts. Right. You can hedge. You can sell options to collect premium. Right. So like options just literally have a different return profile than perps, which means they're just separate financial products. Just different assets. Right. So there is no world where perps eats into all of the options market.
