FTX volatility tokens are similar to other ERC-20 tokens in the sense that they can be traded, held, or transferred the same as any other token (though holding volatility tokens for long periods of time is not recommended). The main difference with volatility tokens is that they provide traders with exposure to the implied volatility of crypto assets.
What are volatility tokens?
Volatility tokens are ERC-20 tokens that aim to track the implied volatility of crypto markets. FTX volatility tokens get their exposure to an asset’s implied volatility using FTX MOVE contracts.
There are currently two FTX volatility tokens: BVOL and IBVOL. BVOL targets tracking the daily returns of being 1x long the implied volatility of BTC and IBVOL targets tracking the daily returns of being 1x short the implied volatility of BTC.
Learn more about how volatility tokens work in our FTX Volatility Tokens Pricing, Value, and Rebalancing Help Center article.
How are volatility tokens different from leveraged tokens?
Volatility tokens are similar to leveraged tokens in that they are both ERC-20 tokens that provide simplified methods for gaining unique exposure to crypto assets. Both leveraged tokens and volatility tokens can be traded, transferred, and held similarly to standard assets (though holding for long periods of time is not recommended for either type of token). However, leveraged tokens allow you to get exposure to whether an asset’s price increases or decreases while volatility tokens allow you to get exposure to the overall volatility of an asset.
What are the benefits of trading volatility tokens?
Trading FTX volatility tokens provide traders with the flexibility and simplicity of any other ERC-20 token while giving them exposure to an asset’s volatility. You may not have an opinion on whether an asset’s price is going to move in a certain direction but you may have an opinion on how much the asset’s price will move. That’s where volatility tokens come in. If you think an asset’s markets are going to be more volatile than expectations, you could buy BVOL and if you think they're going to be less volatile, you could buy IBVOL.
What are the risks when trading volatility tokens?
FTX volatility tokens are at higher risk than other spot markets and are likely more volatile. They can gain or lose large amounts of their value in a day. These tokens will perform differently than regular tradable assets. Their target returns will not necessarily be sustained over the long term. Please use caution when trading these assets and only trade them if you understand how they work. For more information, please see FTX’s Help Center article.
Which volatility tokens are available on Poloniex?
FTX currently has two volatility tokens for Bitcoin, both of which are available on Poloniex.
BVOL: 1X Long Bitcoin’s Implied Volatility
IBVOL: 1X Short Bitcoin’s Implied Volatility
Who is the issuer of the volatility tokens on Poloniex?
FTX is the issuer of these assets.
What fees are involved when trading volatility tokens?
To traders buying and selling volatility tokens in our spot markets, the only fees that apply are our standard trading fees. You can check your fees here.
Where can I learn more about FTX volatility tokens?
FTX has resources available to learn more about their new volatility tokens and MOVE contracts. You can check out their Help Center articles here.
Please note: FTX’s volatility tokens are high-risk products that can gain or lose large amounts of their value in a day, will perform differently than other tradable assets, and will likely not sustain their target returns long-term. While volatility tokens can be helpful tools for traders, it is not recommended to hold these assets long-term. Use caution when trading these assets and only trade them if you understand how they work. Learn more about FTX’s volatility tokens on our Help Center.