Exercising Options
"Exercising a call" means you are demanding to buy the crypto asset at the strike price. In order to exercise the option, you must send the tokens and the corresponding amount of the strike price, before the expiration. This can be done by accessing "Manage" in the top menu of your dashboard.
Example: Exercising 2 "ACO ETH-2000USDC-C-26JUN20-0800UTC"
Action | Amount |
You send | 2 tokens + 4000 USDC |
You'll receive | 2 ETH |
By using Flash Exercise to exercise call options, instead of sending the amount required to exercise, this amount is covered using Uniswap V2 Flash Swaps and you'll receive the remaining amount (intrinsic value) in ETH.
Net Profit = Number of Options * (( Uniswap Price - Strike Price ) / Uniswap Price )
Example: Exercising 2 "ACO ETH-2000USDC-C-26JUN20-0800UTC" and Uniswap Price = 2500 USDC.
Action | Amount |
You send | 2 tokens |
You'll receive (total profit) | 0.4 ETH (2*(2500-2000)/2500) |
"Exercising a put" means you are demanding to sell the crypto asset at the strike price. In order to exercise the option, go to you must send the tokens and the corresponding amount of the underlying asset, before the expiration. This can be done by accessing "Manage" in the top menu of your dashboard.
Example: Exercising 2 "ACO ETH-2000USDC-P-26JUN20-0800UTC"
Action | Amount |
You send | 2 tokens + 2 ETH |
You'll receive | 4000 USDC |
By using Flash Exercise to exercise put options, instead of sending the amount required to exercise, this amount is covered using Uniswap V2 Flash Swaps and you'll receive the remaining amount (intrinsic value) in USDC.
Net Profit = Number of Options * ( Strike Price - Uniswap Price )
Example: Exercising 2 "ACO ETH-3000USDC-C-26JUN20-0800UTC" and Uniswap Price = 2500 USDC.
Action | Amount |
You send | 2 tokens |
You'll receive | 1000 USDC (2*(3000-2500)) |
Once an options contract expires, the token itself is worthless. If you own an option and it expires unexercised, you no longer have any of the rights inherent in that contract and you lose the premium you paid for it.
YES. Options are not exercised automatically.
Last modified 1yr ago