DIB Options

Description

DIB Options are so called European style cash settled options. "European style" means that options cannot be exercised before expiration, but can only be exercised after expiration. "Cash settled" means that when an option is exercised, the seller of the contract pays any profit due to the buyer in cash, rather than any asset transfer taking place.

Users can choose from the most popular stablecoins or cryptocurrencies for premium and margin payments of the options. The standard size of an option is 1, but creating multiple options with one order is possible. The maximum profit is always the margin that is put up by the seller of the contract. In any case, the seller receives the premium from buyer.

To settle the contract after expiration, the user has to withdraw his payout from the contract to his wallet himself, or allow a third party to do this for him, by sending a 'withdraw' message to the blockchain. If price-data to settle the contract with has not been fetched yet, user will have to fetch the data in a separate transaction after which the withdrawal from the contract can be calculated. If the data has not been able to be fetched after 2 weeks, the seller is able to withdraw his margin.

DIB Options can be used to manage price risk of, for example, stocks, bonds and cryptocurrencies, but DIB Options can also be used for speculation and serve as a tool for leverage.

Product specifications

Contract Details

Option style

European Cash Settled

Expiry date and time

Every Friday, 18:00 UTC

Expiration periods

Options are made available 3 weeks before their expiration

Underlying assets

ETH/USD, BTC/USD etc.

Contract Size

1 of the underlying asset

Strike price intervals

2,5 points when the underlying asset trades between $5 and $25,

5 points when the underlying asset trades between $25 and $200

10 points when the underlying asset trades between $200 and $500

25 points when the underlying asset trades between $500 and $1000

50 points when the underlying asset trades between $1000 and $2000

125 points when the underlying asset trades above $2000.

Margin requirements

Margin currencies

Premium payment frequency

Once at creation of the contract, directly received by seller

Premium currencies

Trading hours

24/7

Settlement fee

...%

Trading fees

...%

Oracle solution

Data source(s) for settlement

.....

Computation logic

Emergency trigger

After 2 weeks of no data fetching

OracleID

.....

SyntheticID

Examples:

1. You buy a call option on ETH/USD with strike price $175 for 10 DAI, and the seller of the contract puts up 50 DAI as margin. The reference price for the contract is Binance. This contract gives you the right to buy 1 ETH for $175.-. Imagine at the time of expiration, ETH/USD reaches $200. Now this option will settle with a value of 25 DAI ($200 - $175 = $25).

You send a withdraw message to the blockchain, and here is calculated that you receive 25 DAI from the margin.

If the seller of the contract withdraws, he receives back the remaining 25 DAI. Also, at creation of the contract he received a premium of 10 DAI.

Any call option with a strike price above $200 expires without value.

2. You buy a put option on

3. You sell a call option

4. You sell a put option