ETH Call Options
Hegic ETH call option is an on-chain contract that gives a holder (buyer) a right to swap their DAI stablecoins for ETH at a fixed price during a certain period.
ETH call option contract holder chooses the size, period and strike price for an option contract. A size of an ETH call option is the amount of DAI that the holder will be able to swap for a fixed amount of ETH when exercising the contract. A period is the number of days or weeks that the ETH option contract will be active for. A strike price is the set price at which DAI can be swapped for ETH when it is exercised.
Premium and settlement fee will be calculated for the chosen size, period and strike price for an ETH call option contract. After that, the holder will be asked to pay this amount in ETH (premium plus settlement fee) using their wallet.
After miners confirm the transaction, the holder will be able to exercise the ETH call option contract during the certain period using the Ethereum address that was used to conduct the payment.
For exercising an ETH call option contract, the holder sends DAI to the contract and automatically receives ETH that was locked for them on the contract.
An ETH call option contract holder (buyer) holder is only able to exercise the contract before the expiration time that the contract has been activated for.
100% of an ETH call option contract size in ETH will be locked on a contract for a period of holding that the holder has paid for. Example: a holder pays 0.05 ETH for a 1 ETH put option contracts with a strike price $200. Amount of ETH that is equal to the strike price of a contract will be locked for this particular holder. They willl be able to exercise this contract before the expiration time and swap their 200 DAI for 1 ETH. This 1 ETH will be locked on the contract. Holders always need to exercise the ETH call options contracts by themselves. There is no auto-settlement at expiration on Hegic.
Yes, an ETH call option contract can be exercised at any given moment during the period that the holder has paid for.
ETH call options contracts can be activated for:
1 Day (24 Hours) 1 Week (7 Days / 168 Hours) 2 Weeks (14 Days / 336 Hours) 3 Weeks (21 Days / 504 Hours) 4 Weeks (28 Days / 672 Hours)
The contract period starts at the moment of actviating an ETH call option contract and will expire in 1 day / 1 week / 2 weeks / 3 weeks / 4 weeks respectively.
A strike price is the set price at which DAI can be swapped for ETH when the ETH call option contract is exercised. Holders can choose any strike price for their ETH call options contracts on Hegic.
Example: the current price of ETH is $200. A holder can pay for a right to buy ETH at a fixed price of $250 (out-of-the-money ETH call option) if they want to pay less or they can pay for a right to buy ETH at a fixed price of $150 (in-the-money ETH call option) if they can pay more and have a closer break-even of their contract.
To buy an ETH call option contract a holder pays a premium plus settlement fee. Current total prices of the ETH put options contracts are: 1 Day: 1.9% | 7 Days: 4.9% | 14 Days: 6.9% | 21 Days: 8.5% | 28 Days: 9.8%