Everlasting Options
Everstrike offers floating-strike everlasting options.
The options are cash-settled, and have no expiration date. The settlement currency is always in USD.
The strike prices of the options are floating. They are pinned to the 200-hour EMA of the underlier, plus or minus some multiplier.
The options are priced and margined in USD. An everlasting BTC call option is the right to buy 1 BTC at a specific price (the strike price), and a put option is the right to sell 1 BTC at a specific price (the strike price). Since the strike prices on Everstrike are floating, this may or may not be the strike price of the option when you bought or sold it.
Example 1
A trader buys a floating-strike everlasting BTC call option for a price of 1,000 USD. The strike price of the option is pinned to the 200-hour EMA of BTC. At the time of purchase, the 200-hour EMA of BTC is 22,000, and the price of BTC is 23,000. Now he has the right to buy 1 BTC at any time in the future, at a price that equals the 200-hour EMA of BTC.
One month later, the 200-hour EMA of BTC has risen to 23,000, and the price of BTC has risen to 25,000. If the trader decides to sell his option now, he will profit the difference between the price of BTC and the 200-hour EMA of BTC, minus his initial purchase price ($25,000 - $23,000 - $1,000 = $1,000). This amount will be automatically credited to his balance, should he decide to sell it.
Example 2
A trader buys a floating-strike everlasting BTC call option for a price of 500 USD. The strike price of the option is pinned to the 200-hour EMA of BTC. At the time of purchase, the 200-hour EMA of BTC is 20,000, and the price of BTC is 20,500.
One month later, the 200-hour EMA of BTC has dropped to 18,000, and the price of BTC has dropped to 19,000. If the trader decides to sell his option now, he will profit the difference between the price of BTC, and the 200-hour EMA of BTC, minus his initial purchase price ($19,000 - $18,000 - $500 = $500).
Example 3
A trader buys a floating-strike everlasting BTC call option for a price of 2,000 USD. The strike price of the option is pinned to the 200-hour EMA of BTC (plus 10 percent). At the time of purchase, the 200-hour EMA of BTC (plus 10 percent) is 22,000, and the price of BTC is 24,000.
One month later, the 200-hour EMA of BTC (plus 10 percent) has risen to 24,000, and the price of BTC has risen to 25,000. If the trader decides to sell his option now, he will profit the difference between the price of BTC, and the 200-hour EMA of BTC (plus 10 percent), minus his initial purchase price ($25,000 - $24,000 - $2,000 = -$1,000).
Example 4
A trader buys a floating-strike everlasting BTC put option for a price of 100 USD. The strike price of the option is pinned to the 200-hour EMA of BTC (minus 10 percent). At the time of purchase, the 200-hour EMA of BTC (minus 10 percent) is 20,000, and the price of BTC is 22,000.
One month later, the 200-hour EMA of BTC (minus 10 percent) has dropped to 19,000, and the price of BTC has dropped to 18,000. If the trader decides to sell his option now, he will profit the difference between the 200-hour EMA of BTC (minus 10 percent), and the price of BTC, minus his initial purchase price ($19,000 - $18,000 - $100 = $900).
Last modified 1mo ago