Forwards

A Forward is a contract where the user agrees to buy or sell an asset at a fixed price and date in the future. Gain or loss depends on the difference between the agreed price and the market price at expiry.

User can choose between buying / selling next auction forward or forward to any of the expiry dates

Choose Type: Next Auction |Ithaca expiry

Choose Side: Long + | short -

Size corresponds to ETH equivalent exposure

User enters the unit price at which user wants to go long ETH using USDC.

+ Next auction forward will mean using USDC at unit price to go long ETH; this is the equivalent of going long ETH on a ‘ spot ‘ basis in an unmargined world

- Next auction forward means using ETH at unit price to go long USDC | short ETH

+ Dated forward means taking delivery of ETH at expiry at entered unit price; user decides the unit price at which user is willing to go long ETH at expiry date;

Payoff: ETH at expiry - strike

A user entering an order to long one Forward of strike K will have to post an amount of K USDC as collateral.

S(T): Ithaca Reference price

If S(T) > K then the buyer will receive [ S(T) – K ] / S(T) ETH and his entire USDC collateral back.

If S(T) < K then the buyer will receive an amount of his collateral equal to S(T)

(that is K - [ K – S(T) ]) in USDC

-Dated forward means making delivery of ETH at expiry at entered unit price and therefore earning the difference between strike and ETH price at expiry; payoff: strike - ETH;

A user entering an order to short one Forward of strike K will have to post an amount of one ETH as collateral.

At maturity, the payoff of a short Forward

Payoff: strike - ETH at expiry

S(T) Ithaca reference price

If S(T) > K then the seller will receive an amount of his ETH collateral equal to

1 - [ S(T) – K ] / S(T)

If S(T) < K then the seller will receive [ K - S(T)] USDC and his entire ETH collateral back.