In this short article and the following pieces, we are going to introduce how to use Moret to trade options, buy/sell volatility tokens, provide liquidity and create liquidity pools. We hope you will notice how easy it is to use Moret to participate in DeFi derivatives market.
On the top-right corner of the main page of moret.io, click Start Trading and it will launch the Trader app. Once your MetaMask wallet is connected to Moret on Polygon chain, you’ll be able to see the market and option quotes straightaway. Note that if a non-Polygon blockchain is used (such as Ethereum or BSC), the app won’t be available until Polygon chain is selected.
The centre of the Trader app is the New option section where option contract details are entered, such as
- direction of the trade (Buy or Sell),
- type of options (Call or Put),
- payment tokens (USDC, wrapped ETH, or ETH volatility token which will be explained more in detail in Moret intro #2),
- option strike,
- amount and
- option expiry.
Next to selected option strike, the app shows the moneyness of the current price vs strike. For example, ATM (at-the-money) means the strike and moneyness are almost the same. 5% ITM (in-the-money) means that the current price is 5% above the strike in the case of call option, or 5% below the strike in the case of put option. Opposite is the case for OTM (out-of-the-money).
Next to expiry the app displays the RV, or realised volatility, which is provided by the integrated oracle within Moret. This value of volatility the backbone of Implied Volatility level used in pricing option premiums.
The page automatically calculates the Implied Volatility, Premium and Collateral values based on the details entered in the section.
- The Implied Volatility is based on the RV plus or minus a premium which is calculated based on the volatility AMM model.
- Premium values can be displayed in the selected payment tokens amongst the three choices available.
- Collateral is required for selling options. The collateral amount equals to the strike for selling put options, or spot price of the underlying token for selling call options. Collaterals are paid in ETH/BTC if premiums are also paid in ETH/BTC. Otherwise collaterals are paid in USDC.
Once the option details are entered, you could click the Trade button and confirm the contract:
Once you are fine with the contract details, please Execute the transaction which will first check the allowance of premium and collaterals granted to the Exchange smart contract; and then execute the option trade on-chain.
When the block of the option trade transaction is mined, the link to Polygonscan is updated to show the transaction details. The Holdings table will also be updated with the latest trade.
So here is the simple and easy guide on how to trade options on Moret. Please contact us on Telegram (@moret_options), twitter (@moret_io) and Discord (@moret) to find out more.
