Topic: Options on the Bitshares Exchange (Read 145 times)

Most recently, the first option in the Prediction Market was launched on the Bitshares Exchange.
At the moment, this is a call option on the value of the BTS cryptocurrency with Strike 0.5 CNY. Options on the Bitshares Exchange are created according to the European standard, i.e. the option may not be requested until the expiration date, but at any time it can be sold / bought on the exchange at current prices.

Options:
Name - CALLCNY05MARCH19
Type - Call
Strike - 0.5 CNY
Expiration Date - 03/15/2019
The creator of the option is the employee3 account. This also supports the liquidity of the instrument.

Redemption option:
On March 15, 2019, employee3 will produce a Global Settle CALLCNY05MARCH19 option set at a price of 0 BTS (if at 14:00 03/15/19 the price of BTS is less than 0.5 CNY) or at a price of 1 BTS (if at 14:00 03/15/19 price BTS will be greater than or equal to 0.5 CNY).
At the same time, although the creator of the employee3 option provides a Feed, this account has no financial motivation to provide an incorrect Feed since it always holds the zero position, and the creator’s income is 2% of the commission for trading the option.

Financial results:
To date, the value of the underlying asset (BTS) to the CNY is about 0.25 BTS/CNY. The current value of the option is about 0.16 BTS.
In the event that at the time of expiration the price of the underlying asset (BTS) rises by half and amounts to 0.5 BTS/CNY - the option quote will be 1. Anyone buying an option for 0.16 BTS will be able to make a settle at 1BTS and make a profit in 1BTS for every 0.16 BTS invested, which is about 625%.
You can also place an order to buy an option at a much lower price that you consider acceptable.
If you assume that the price of the underlying asset (BTS) does not rise by March 2019 above the 0.5 BTS/CNY mark, you can borrow the CALLCNY05MARCH19 option and sell it at the market price (0.16 BTS).
In this case, the expiration of the option in March 2019 will occur at a price of 0, and you will be refunded your deposit in full. At the same time, the profit for each 1 BTS will be 0.16 BTS, i.e. 16%.

Prediction Market
The market for forecasts is different from the smart asset market. A 1: 1 collateral is required here, while a 1: 1.75 collateral is required on smart assets on the Bitshares Exchange.
Settle in the market forecasts can be made only after the expiration date. In the case of the option CALLCNY05MARCH19 after 14:00 03/15/2019. However, at any time you can trade options on the exchange at market prices.