πŸ“ˆ
Trade Options

How to trade?

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 (
ii
) 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
ii
. 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:
FundingFeefor1Day=OptionMarkPriceβˆ’Payoff,Funding Fee for 1 Day = Option Mark Price - Payoff,
where
Payoff=max(spotβˆ’strike,0)forcallPayoff = max(spot - strike, 0) for call
Payoff=max(strikeβˆ’spot,0)forputPayoff = 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
Trading
Deri Protocol

Risk Warning

Trading Margins & Contracts on Deri Protocol includes but is not limited to - a high level of risk, and may not be suitable for all kinds of investors. The enormous degree of leverage can work in favor of you as well as against you. Before making the decision to invest using Deri Protocol, you should carefully consider your level of experience, investment objectives and risk appetite. There is a possibility that you may lose part of your investment or all of your initial investment. You should be aware of all the risks associated with trading contracts and margin. Deri Protocol will not be responsible for any losses, damages or claims arising from events falling within the scope of the events mentioned above. We urgently advise you not to invest money that you cannot afford to lose and we also recommend you to seek advice from an independent financial adviser, If you have any questions or doubts!
Last modified 27d ago