Thetanuts Finance is a new protocol that helps users to access crypto structured products on multiple decentralised networks to generate a return for their portfolio. ThetaNUTS Finance supports options on ETH, BSC, AVAX, MATIC, FTM, AURORA, BOBA, CRO, OASIS, SMARTBCH, MOONBEAM. Ethereum has most tokens. I love Fantom. Only tokens allowed in Fantom is WFTM. AVAX chain you have options for WAVAX. BOBA chain you have options for WBOBA. CRO chain you have options for WCRO. OASIS chain you have options for WROSS. In MATIC the have options for WMATIC put-selling and covered-calls. They offer covered-call, Put-selling, Physical-covered-call. A user can deposit into the vault at any point in time except during the auction period. When the user deposits, their funds join the deposit queue. When a new epoch begins, their deposits join the vault and begin to generate yield and subject to vault risks. A user can initiate withdrawal from the vault at any point in time except during the auction period. When the user initiates withdraw, their funds join the withdrawal pool after epoch settlement. Funds in the withdrawal pool will not be share in neither the yield generated nor the risks associated with the vault. Users can claim their withdrawals from the withdrawal pool at any time.
Covered-calls on Thetanuts:
I am going to show you how to do a covered-call on Fantom chain by depositing WFTM tokens. I use covered-call option because I intend to hold the underlying asset for a long time but do not expect a big price movement in the short term until the relevant expiry date. Usually leans towards a more bullish sentiment.
The vault earns yield at 81% APY on its WFTM deposits by selling covered calls directly to market makers. Yield earned each week is re-compounded. Running a covered call strategy locks the dollar value of the collateral when market price is higher than the strike price in my case it is $1.50 for WFTM token, but will result in a reduction in my number of WFTM tokens. Currently FTM market price is $1.41. For this example, I deposited 15 WFTM tokens. Here is is how ot do it. First, I have to approve the withdrawal with FTM gas. Secondly, I have deposit actual funds in WFTM in my case 15 WFTM tokens. The risk of basic covered calls is missing out on coin appreciation in exchange for consistent premium. If the assets value appreciates greatly, the vault strategy will only benefit up to the strike price but no higher as a call was written. Thinking back, I should have deposited on put-selling because strike price is $1.05 for FTM where current market price is $1.41 and it is unlikely FTM will drop that low in current market conditions. I will explain put-selling next.
Put-selling on Thetanuts:
The risk is of put-selling is running a covered put strategy locks the dollar value of the collateral when market price is lower than the strike price, but will result in a reduction in your number of tokens you deposited. You have to withdraw initials must be claimed after the expiry date. Participants with pending deposits cannot withdraw unless the deposit is first cancelled. Settlement will apply to the value you requested to withdraw so it will reflect settlement losses, if any, on withdrawal. The risk of this basic covered put options strategies prevent profit from significant movements as you would have already established the minimum buying price by your covered put. This means that your potential upside is capped in exchange for the certainty of receiving a premium.
Risk and Rewards:
For basic covered call, Thetanuts runs 6-10 delta strategies for ETH and BTC based on prevailing market rates with reference to Deribit. Deribit is a Panama-based futures and options trading platform that lists derivatives priced in U.S. dollars for bitcoin and Ether underlying products. For all other tokens, Thetanuts sets the strike at 25% above spot. Strikes are selected based on these parameters at 0930 UTC. For basic covered put similar to basic covered call strike is set at 20% below spot. ThetaNuts used Coinbase Price feed and Chainlink price feeds as backup price oracles. Defi safety wise Thetanuts is currently audited by X41-Audefi. However, in defisafety.com there is no entry regarding the Thetanauts Finance. I would not ape in with lots of money especially life savings because this is a new project. I am interested in probable Airdrop so I invested very small amount of money.
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