Trading Options

Key Considerations When Trading Eve Options

Before engaging in options trading on Eve Exchange, it is crucial to grasp the unique structure of Eve options, which may deviate from your previous experience. For a comprehensive understanding, refer to the above section outlining how Eve options function.

Here, we delve into specific aspects that warrant further clarification:

Paying Premiums

As a trader, it's essential to recognize that the premiums you pay encompass the entire trade quantity or size. Consequently, be mindful that having the full collateral available is imperative to exercise or settle the option when it becomes in-the-money.

Please note that premiums are non-refundable.

Settling Trades

Executing or settling the option(s) you've acquired requires two vital steps:

1. Exercising/Settling before Expiry: It's crucial to ensure you initiate the exercise or settlement process before the expiry date of the option.

2. Adequate Collateral for Settlement: Depending on the option type... For Call options, you'll need the necessary stablecoins to purchase the underlying asset. For Put options, having the underlying asset in your wallet enables you to sell it.

While exercising the option, you will encounter a field displaying unrealized profit. Keep in mind that this calculation relies on the Oracle price minus the strike price. As a result, the unrealized profit may differ from the realized profit that results from withdrawing your proceeds and subsequently selling them on a centralized or decentralized exchange.

Given the inherent volatility of crypto assets, prudent planning is advised before exercising options. You should decide whether to hold onto your proceeds or promptly sell them to capitalize on gains.

Conclusion

To reiterate, the experimental nature of Version 1 options is acknowledged. We understand that physically settled options without borrowing capabilities might be perceived as less appealing than cash-settled options or physically settled options with borrowing opportunities.

It's essential for traders to recognize that while Version 1 has its limitations, we are diligently working on Version 2 to incorporate more familiar and user-friendly features, including a borrowing facility. If you appreciate the current offerings and are enthusiastic about upcoming developments, we encourage your involvement in our Telegram community. Your feedback is invaluable as we strive to refine and expand our platform.