Case Study: High Notional Vanilla Option

The Problem

A top 100 token issuer was seeking a cost-effective and scalable way to hedge its treasury exposure. The issuer required a high notional vanilla option trade—eight figures in size—while ensuring competitive pricing and execution efficiency. Given market fragmentation and varying levels of liquidity, many counterparties were unable to provide the required size or offered uncompetitive pricing.

The Solution

We leveraged our expertise in alternative assets and derivatives structuring to execute the vanilla option trade with the following advantages:

1. Competitive Pricing – Our access to deep liquidity and sophisticated pricing models allowed the issuer to secure a significantly better premium than alternative market makers.
2. Scalable Size – Unlike other counterparties who struggled with size limitations, we successfully structured and executed an eight-figure notional trade, fully accommodating the issuer’s needs.
3. Efficient Execution – Through strategic counterparty selection and execution management, Caladan minimized slippage and ensured optimal risk transfer.
4. Long-Term Partnership – Instead of a one-time transaction, we structured the engagement as part of a broader strategy, reinforcing its commitment to long-term collaboration and customized solutions.

The Results

• The project successfully hedged their treasury exposure with a competitively priced vanilla option, and were able to make nearly 30% yield on the option. 
• The project achieved cost savings through superior pricing, securing better terms than competing counterparties.
• The success of this trade laid the foundation for an ongoing strategic partnership, with future structured solutions tailored to the project’s evolving needs.