What Matters to Different Users in Crypto Options and Structured Products

Usage patterns and priorities across retail, professional retail, and institutional participants.

Crypto derivatives – particularly options and structured products – have been part of the market from an early stage. While the ecosystem is still evolving and far from mature, these instruments are already used in meaningful ways across the market. They shape how different participants express views, manage exposure, and structure outcomes. Their value lies less in complexity and more in how well they fit different users’ objectives, constraints, and decision styles.

An option can mean very different things to different participants. For some, it is simply a way to express a market view; for others, it becomes a tool for hedging, capital efficiency, or portfolio construction. Looking at how different users actually use options helps clarify what tends to matter most in practice.

This article examines the usage patterns and priorities of three client segments – Retail, Pro Retail (Professional Retail), and Institutional – and highlights what each group typically focuses on when engaging with crypto options and structured products.

Retail: Expressing Views and Clear Outcomes

For most retail users, crypto options are primarily a way to express market views – such as bullish, bearish, or range-bound expectations – often as an extension of spot or perpetual trading, or to earn yield when such exposure is offered through simple, packaged products.

What Tends to Matter Most

• Simplicity and Intuition

Retail users generally prefer products that are easy to understand and straightforward to execute. Clear payoff diagrams, limited parameters, and intuitive structures often matter more than flexibility.

• Implicit Risk Management and Predictable Behavior

Retail users do not always explicitly analyze downside risk or worst-case scenarios. From a design perspective, this makes implicit risk management particularly important. Products that behave in a bounded and predictable way – avoiding sudden or unintuitive losses – tend to support more confident and sustainable participation, even when risk is not consciously evaluated.

• Outcome Visibility

Clear and concrete outcomes are easier to engage with than abstract option PnL. Retail users tend to respond better when results broadly align with their expectations of how a product should behave.

• Communities and Guided Participation

Communities, KOL-led trading guidance, and platform features such as copy trading or strategy templates allow retail users to participate by following proven workflows, rather than relying on technical understanding.

For retail users, options and structured products tend to be most useful when market views can be expressed clearly, and when they offer simple, transparent access to yield with well-defined and easily understood risk – return profiles, while complexity and risk are absorbed at the design level – a principle that applies equally to both small retail and HNW individuals. For these users, the effectiveness of such products depends not only on payoff design, but also on the trustworthiness and usability of the distribution channel.

Pro Retail: Constructing Payoffs and Reducing Friction

Pro retail users are typically more experienced and actively manage their own capital. While return generation remains important, options are more often used as flexible tools within broader trading and risk frameworks.

In practice, this often involves using vanilla options and replicated structures to construct specific payoff profiles. Pro retail users commonly build multi-leg strategies – such as iron condors, collars, spreads, or other structured combinations – to express more nuanced market views, enhance yield under certain conditions, manage specific portfolio risks, or implement repeatable trading strategies across different market regimes.

What Tends to Matter Most

• Improving Net Returns Through Lower Friction

For pro retail users, small inefficiencies compound quickly. Better fee tiers, tighter spreads, access to yield-enhancing earn products, and efficient margin usage directly translate into higher net returns. Reducing trading, funding, and operational friction is often more impactful than incremental alpha.

• Tools That Make Trading and Risk Management Easier

Pro retail users value tools that help them implement strategies more effectively and with fewer operational errors. Features such as dynamic delta hedging (DDH), portfolio-level risk analytics, Greeks aggregation, scenario analysis, and strategy visualization reduce both cognitive load and execution risk.

• Reliable Execution as a Baseline Requirement

Stable order books, predictable fills, and consistent behavior during volatile periods are expected rather than differentiated. Execution quality matters insofar as it avoids becoming a hidden source of cost or risk for multi-leg and strategy-based trading.

• Learning and Peer Exchange

Access to communities and shared strategy frameworks remains valuable even for experienced participants.

For pro retail participants, options and structured products are most valuable when platforms reduce friction and provide tools that make strategy execution and risk management easier, more efficient, and less error-prone.

Institutional: Structuring Exposure and Trading at Scale

Institutional participants engage with crypto options and structured products in a wide range of ways. Usage spans trading and managing implied volatility across strikes and tenors, positioning along skew and convexity, expressing relative-value views, and actively managing Greeks at both position and portfolio levels. The next article will focus specifically on institutional usage in greater depth; here, a few representative examples illustrate how these instruments are commonly used in practice.

• Transform spot, inventory, or treasury assets into conditional cash-flow profiles, such as monetizing volatility within predefined price ranges, while operating within liquidity, duration, and risk constraints
• Manage downside and tail risk through payoff structures that respond to predefined price conditions or observation rules
• Express volatility and relative-value views, including positioning across implied versus realized volatility, term structure, skew, or relative behavior between assets
• Construct multi-asset or relative exposures, such as baskets or relative-performance structures, to manage correlation, concentration, or diversification objectives

What Tends to Matter Most

• Capital Safety and Asset Control

Clear asset ownership, robust custody arrangements (including off-exchange or segregated custody), and predictable settlement mechanics are foundational.

• Explainable and Consistent Risk and Trading Frameworks

Institutions prioritize frameworks that are transparent, explainable, and stable across both risk and trading. Margin methodologies – including multi-currency and portfolio margining – along with cross-instrument offsets, Greeks aggregation, pricing, and PnL calculations must be correct, consistent, and interpretable by trading desks, risk teams, and governance functions.

• Predictable Liquidation and Stress Behavior

Clearly defined liquidation rules, insurance fund design, and ADL mechanisms are evaluated based on soundness, transparency, and their impact on trading teams during extreme market conditions.

• Scalable and Institution-Grade Liquidity Access

Liquidity is assessed not only by top-of-book tightness, but by depth, scalability, and reliability under size. Beyond options liquidity itself, institutions also evaluate the availability and robustness of spot, perpetual, and dated futures liquidity, which are critical for delta hedging and dynamic risk management. Both order-book liquidity and RFQ-based execution play important roles when deploying or unwinding structured exposures.

• System Stability and API Reliability

Institutions place strong emphasis on system stability and the quality of trading APIs. Low latency, predictable performance under load, and resilient behavior during volatile periods are essential, as many institutional strategies rely on automated execution, real-time risk monitoring, and continuous hedging.

• Operational, Regulatory, and Governance Compatibility

Trading platforms must operate within clear legal entities and credible regulatory frameworks. Appropriate licensing, well-defined compliance standards, and auditable governance structures are foundational, alongside robust reporting, controls, approval workflows, and operational resilience. Stability of rules, platform behavior, and access conditions is often valued more than rapid feature iteration.

For institutional participants, options and structured products are most valuable when platforms ensure capital safety and regulatory compliance, support trading at scale with robust liquidity, and provide explainable risk frameworks and infrastructure that remain reliable under stress.

Closing Thoughts

Crypto options and structured products do not serve a single, uniform audience. Their usefulness emerges only when they are designed and delivered with a clear understanding of who is using them, for what purpose, and under what constraints.

Retail participants benefit from clarity and bounded outcomes; pro retail users value lower friction and tools that make strategy execution more efficient; institutional participants require scale, robustness, and governance-grade infrastructure.

As the crypto derivatives ecosystem continues to evolve, progress will depend on how well platforms understand user needs and translate them into meaningful value through appropriate instruments, infrastructure, and risk frameworks.

---

What Matters to Different Users in Crypto Options and Structured Products was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.