No Gain, No Payin’

Buy an option WITHOUT spending premium with maximum downside amount to be lost if asset price ends up at the strike; if you do not get the direction right, you also get your collateral back!

Description

If Call Chosen.

i. Select (WETH) Price Reference.

ii. Select minimum Expected (WETH) move from (WETH) Price Reference.

(maximum potential (USDC) loss if (WETH) Price at Expiry = (WETH) Price Reference.)

iii. Post minimum expected (WETH) Upside as collateral.

- If (WETH) Price @ Expiry > (WETH) Price Reference + max Downside], receive (WETH) Price @ Expiry - [min Upside]

- If (WETH) Price @ Expiry < (WETH) Price Reference, receive collateral back.

If put Chosen.

i. Select (WETH) Price Reference.

ii. Select minimum Expected (WETH) move from (WETH) Price Reference.

(maximum potential (USDC) loss if (WETH) Price at Expiry = (WETH) Price Reference.)

iii. Post minimum expected (WETH) Upside as collateral.

- If (WETH) Price @ Expiry < (WETH) Price Reference + max Downside], receive (WETH) Price @ Expiry - [min Upside]

- If (WETH) Price @ Expiry > (WETH) Price Reference, receive collateral back.

Select Call or Put ( these products are described as contingent call and put respectively in traditional finance )

Select WETH price reference; the level from which upwards or downwards the user wishes to express a view from. ( there will be a small number of these prices reference / strikes preloaded, corresponding to ones where user may expect some liquidity provision around focal auctions by market makers with rights and obligations )

Post user selecting call and price reference, user selects his maximum potential loss which corresponds to the minimum upside from price reference required to breakeven on the purchased long option; the breakeven price reflects the sum of price reference and minimum upside required / maximum potential loss on collateral posted.

The inputs are the price reference and the max potential loss/ min upside; payoff diagram reflects the risk reward profile which crucially involves the return of the collateral in case the desired direction of travel for the underlying does not materialize. If user enters a call option trade and eth price ends up at expiry lower than the reference price, initial collateral gets returned without any other cost incurred, truly a case where if there is no gain, there is no Payin’ anything!

Post user selecting put and price reference, user selects his maximum potential loss which corresponds to the minimum downside from price reference required to breakeven on the purchased long put option; the breakeven price reflects the sum of price reference and minimum downside required / maximum potential loss on collateral posted.

The inputs are the price reference and the max potential loss/ min upside; payoff diagram reflects the risk reward profile which crucially involves the return of the collateral in case the desired direction of travel for the underlying does not materialize. If user enters a put option trade and eth price ends up at expiry higher than the reference price, initial collateral gets returned without any other cost incurred, truly a case where if there is no gain, there is no Payin’ anything!