Since the launch of Daily Options on Deribit, we currently offer dailies, weeklies, monthlies and quarterly expiries. This offers a lot of flexibility and for that reason, feedback has been very positive. The longer the time to expiry, the greater the time value of the option as the chance for the options to become in the money grows. Daily options only have one or two days remaining lifetime and thus lower time value or premium and thus cheaper. These shorter-dated, cheaper options are great instruments to use for short term strategies enabling the trader to hedge events or benefit from expected short term moves.
On the other hand, options with a short time till expiry pose additional risks; The options with a remaining lifetime of a few hours or one day only will get a higher delta when the BTC price is closer to the expiry price of the option. This means higher potential gains but also bigger losses if BTC does not reach the in the money level.
Options with a shorter lifetime also have a higher theta or the option’s time decay, especially valid for the out of the money options. As the chance of this option becoming in the money becomes smaller every hour, this negatively impacts the value of the option significantly.
Besides flexibility, trading this new type of options is also cheaper when you hold them until expiry as Deribit does not charge the regular delivery fees (0.02%).