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The trading of Deri Everlasting Options is largely similar to that of Deri Perpetual Futures. Please refer to our trading guide of Perpetual Futures for the procedures.

# DPMM of Everlasting Options

For everlasting options, the DPMM (Deri Proactive Market Making) mechanism is adopted to carry out trades. For each everlasting option, DPMM takes two inputs from the oracle: the underlying price and volatility. It calculates then the theoretical price (
$i$
) for the option (refer to the whitepaper for the math of the pricing).
This theoretical price is used as the starting point of the DPMM pricing. When the net position is 0 (the equilibrium state), the option mark price equals the theoretical price
$i$
. Whenever there is a trade, it pushes the mark price toward the trading direction (i.e. a buying trade pushes the price up while a selling pushes it down). The price change due to the trade is proportional to the trade size.

# Funding Fee of Everlasting Options

For each second, assuming the total number of contracts in a long position is L while that in a short position is S. Then every single long contract will pay a funding fee per the following formula:
$Funding Fee for 1 Day = Option Mark Price - Payoff,$
where
$Payoff = max(spot - strike, 0) for call$
$Payoff = max(strike - spot, 0) for put$
Please note: 1. the Funding Fee is accrued on a per-second basis. That is, a funding fee of (Funding Fee for 1 Day)/86400 is accrued every second.
2. Unlike Perpetual Futures, theoretically the funding fee for everlasting options is always positive (i.e. long positions always pay short positions).

# Still got questions about Everlasting Options?

Check out our Everlasting Options - Trading FAQ below