☸️Bullish Options

Bullish options are used by traders when they expect to see a rise in the asset price.

Options AI offers four different types of bullish options:

• Call

• Strap (Classic Strategy)

• Bull Call Spread (Classic Strategy)

• Bull Put Spread (Inversion Strategy)

Call Options

Definition: A call option is an on-chain contract that gives the buyer the right, but not the obligation, to buy ETH or BTC at a fixed price during a certain period.

How Call Options Work:

• The buyer chooses the size, period, and strike price for the option contract.

  • Size: Number of option contracts being acquired.

  • Period: Number of days the contract will be active.

  • Strike Price: Pre-determined price at which the buyer can purchase the asset.

• The premium is calculated based on the chosen parameters, and the buyer pays this amount in USDC.e using their wallet.

• Upon payment, the buyer receives an ERC721 option token representing the purchased option.

• The buyer can exercise the call option during the selected period using the ERC721 token.

• Outcome: If the price of the asset rises above the strike price, the buyer profits. If it does not, the option expires worthless, and the seller keeps the premium.

Exercise Process:

• The buyer sends the ERC721 token to the protocol to exercise the option and receives the profit in USDC.e.

• The contract must be exercised before the expiration time, provided the price is above the strike price.

Available Periods and Strike Prices:

• Periods: Ranging from 7 to 90 days.

• Strike Prices: ATM (current market price) and three OTM prices:

  • Market Price + 10%

  • Market Price + 20%

  • Market Price + 30%

Example:

• Market price of ETH: $2,337.

  • OTM Strike #1: $2,571

  • OTM Strike #2: $2,804

  • OTM Strike #3: $3,038

Advanced Strategies

Strap Strategy

• Structure: Two call options and one put option with the same strike price and expiration.

• Profit Potential: High profits if the price rises sharply, reasonable profits if the price falls.

• Use Case: Betting on rising volatility with a bullish bias.

Bull Call Spread

• Structure: Buying an ATM call option and selling an OTM call option with a higher strike price.

• Profit Potential: Decent profits if the price rises to a certain level with lower cost than an ATM call.

• Use Case: Betting on a moderate price rise.

Bull Put Spread

• Structure: Selling an ATM put option and buying an OTM put option with a lower strike price.

• Profit Potential: Profits if the price stays the same or rises, with immediate profit potential after purchase.

• Use Case: Betting on a stable or rising price without waiting for a rise.