Hypercall founder says options must be simplified to compete with perpetual contracts

Hypercall founders call for streamlining options trading, narrowing spreads and realizing shared hedging accounts

After Hypercall announced that nominal trading volume reached US$536 million in September (total trading volume reached US$592 million since its launch on June 1), its founder Jake Sylvestre proposed a series of improvements, including streamlining the options trading process, narrowing bid-ask spreads and introducing a shared hedging account mechanism.

Strong trading volume in September, with retail and professional traders driving the market together.

Data showed that Hypercall achieved US$536 million in trading volume in September, with most of the activity coming from S & P 500-related contracts. Sylvestre pointed out that repeat traders contributed 93% of trading volume, and the platform also issued a $7,000 HYPE incentive plan during the same period to promote activity.

Sylvestre told the media that options platforms must reduce the number of decisions traders need to make while improving liquidity between contracts with different strike prices and expiration dates. He believes that perpetual contracts are popular because traders can easily choose to go long or short in a deep order book; in contrast, options involve hundreds of contracts, each requiring an independent buyer, seller and price mechanism, and the operation is extremely complex.

Simplified interface: From "selecting contract" to "expressing opinions"

For Sylvestre, the ideal options interface should start with the trader's target position rather than displaying a full-screen contract list. Users should be able to directly express their views on the trend of a certain stock, set the amount of investment, and receive a trading plan that defines risk that is explained in plain language.

He gave an example: "I think Nvidia will rise this week, but I don't want to be liquidated." In his vision, the platform would automatically translate this view into corresponding option positions, rather than requiring users to manually analyze the entire option chain. In addition, the transaction size should be set in US dollars to lower the entry threshold.

Liquidity challenge: Spread is a "tax" that discourages participants

When discussing transaction costs, Sylvestre described spreads as a "tax that keeps people out." He pointed out that current options spreads are typically measured in hundreds of basis points, while spreads in major perpetual contract markets are below one basis point. This huge difference seriously affects market efficiency.

To address this issue, Sylvestre proposes to reduce costs by increasing market maker competition, introducing a portfolio margin system, and providing better volatility data. He also revealed that Hypercall is integrating the Block Scholes model to improve the accuracy of volatility information, especially during closed periods in traditional reference markets.

Shared hedging accounts: A new paradigm for all-weather risk management

Sylvestre introduced an innovative hedging mechanism: market makers can hedge option risk in the same account through Hyperliquid's perpetual contract market. He cited the Nvidia call option as an example. When a market trader sells the option, it will generate risk exposure, and at this time, it can be hedged by buying a Nvidia perpetual contract.

On the Hypercall platform, these two positions can coexist in the same account. The platform's account contract will directly send perpetual orders to Hyperliquid, resulting positions will be included in the portfolio margin calculation, and all collateral will be denominated in USDC. Because hedging partially offsets option risk, this reduces margin requirements for options and eliminates the need to provide additional collateral in another venue.

In addition, Hyperliquid's stock perpetual contracts continued to trade after the U.S. stock market closed. The external reference price remains at the final fair value at the close, while the order price is determined within a set range. This allows market makers to adjust hedging strategies overnight and Sundays to deal with non-trading hours risks.

September data review: Full launch of new products drives growth

According to Hypercall data, since its launch on June 1, the platform's nominal transaction volume has reached US$592 million, of which September accounted for US$536 million. Its products include options related to the S & P 500, Nvidia, Micron, Apple, Microsoft, Meta, Alibaba, SanDisk and SpaceX, as well as Bitcoin and Ethereum contracts.

Sylvestre explained that the high trading volume in September was due to the complete opening of the product line. Bitcoin and Ethereum options were launched at the end of August, making September their first full trading month. Weekend trading services also began in August, allowing investors to trade options contracts from companies such as Nvidia and SpaceX during U.S. exchanges closed. Alibaba and SanDisk contracts went online in mid-August.

According to the founder, most of September's activity stems from transactions in the S & P 500 index that reflected market expectations of an escalation in Iran.

Regulatory developments: compliance comes first, avoiding sensitive areas

Regarding the source of reference prices, Sylvestre said that the market oracle provides input data, of which trade.xyz provides most of the data stream for real-world asset contracts, and the S & P 500 data source has been officially authorized. Regarding the SpaceX contract, he mentioned that Hypercall launched SPCX options on June 3, before the company's June 12 Nasdaq listing. For the first nine days, option prices are priced with reference to Hyperliquid Perpetual Contracts.

Previously, the Hyperliquid Policy Center and trade[XYZ] submitted a proposal to the U.S. Securities and Exchange Commission (SEC) seeking guidance on whether equity-linked perpetual contracts should be regarded as securities futures or security-based swaps. The proposal covers aspects such as disclosure, listing qualifications, investor access and market integrity. The SEC's public statement only confirmed receipt of the submission and did not approve the product or recommendation.

When asked about Hypercall's regulatory approach, Sylvestre emphasized that the platform works closely with consultants to ensure compliance and prohibits access from users from restricted jurisdictions.