2. Why one cannot perform portfolio optimization, especially in crypto, without options

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Optimal Crypto Portfolio Management demands Option Trading. Portfolios must transcend linear exposures and embrace convexity. Options are not only hedging tools; they enable precise, path-dependent or not, trade expressions across price, time, volatility, speed, and 'bumpiness' (jump) dimensions. Unlike perpetual futures with liquidation risk, options allow for non-recourse asymmetric payoffs. Perpetual payoffs can in any case be replicated via option strategies; riskless collateralized, 'basis', and risky borrowing & lending are simple option strategy payoffs.

Convexity transforms volatility from a "risk to mitigate" into "raw material to monetize."

Using systematic option strategies allows for insurance against extinction events by embracing the ‘small losses better than no losses’ approach, and therefore preserving optionality for recovery, while further allocating capital to convex positions that profit not only from which direction markets move, the ‘where’, but also the ‘how’ and ‘when’ markets move.

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