Call Options

P2P ERC20 call options written, bought, settled on the blockchain.

A call option gives the taker or buyer of the option, the right, but not the obligation, to buy a specific amount of an underlying asset (in this case, ERC20 tokens) at a predetermined price (strike price) within a specified period (expiration date).

A call option allows the taker to benefit from potential token price increases. If the market price of the token is above the strike price on expiry, the holder can exercise the option, profiting from the excess value between market price and strike price.

Read PL/ Calculations for a deeper understanding into settlement.

P/L Calculations

Call Option Features:

• Underlying Asset or tokens

• Strike price quoted in paired currency

• Expiry date or duration

• Cost or premium to buy hedge, quoted in paired currency

• Hedge writer always has to provide collateral, thus the payoff (if any) to the taker is always in underlying assets, whereas for writer payoff is always in paired currency of the underlying tokens.

Screenshot

Call Option trade on the OTC Silkroad

Example, scroll to Call Options.

P/L Calculations

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Conditions of use:

• Writer supplies ERC-20 collateral when writing the Call Option.

• Writer dictates Cost to Takers.

• Taker pays cost directly to Writer when buying the Call Option.

• Both parties can initiate a request to topup collateral {Topup Requests}.

• Collateral is only moved from both parties balances when the party accepts a request.

• Taker only can exercise the option before the expiry date.

• After expiry date has passed, Taker has no right to exercise the option.

• Unexercised options are deleted by Miners or the Writer.

• If a miner deletes an expired hedge a fee is charged to Writer.

• If writer deletes an expired hedge no fee is charged to Writer.

• Both parties can also request to change the expiry from future to current date.

• No caps on deal terms: collateral amount, cost amount, duration and strike price.