Typus Vanilla Options are European-Style Options and Cash-Settled. It can only be exercised on the expiration date of the option. Call options are settled in tokens (such as $SUI) while put options are generally settled in stablecoins (such as $USDC).

Currently, Typus Vanilla Options are fully collateralized because the volatility of long-tail assets can cause risks for options players when accessing leveraged options. Insufficient liquidation or intentional manipulation by large asset holders can result in risks for users and the platform.

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In a Covered Call strategy,

This means that vault depositors sell call options while depositing the corresponding underlying asset (such as $SUI) as collateral to cover potential selling risks. 

Vault Depositors (Call Sellers) can immediately harvest their Reward (Premium) under Typus Vaults upon each auction ends. 

If the market price of the underlying (such as $SUI) is higher than the Target Price (Strike Price) on the expiration date, the call buyer (vault bidder) will exercise the call option, and the call seller (vault depositor) needs to sell underlying assets (depositor’s collateral) to the call buyer (vault bidder). Under cash settlement, the amount is equal to the difference between the market price and the target price (strike price) at expiry.

This strategy could help vault depositors increase their returns in a neutral or bearish market movement, while help vault bidders increase their returns in a very bullish market movement.

In a Put Selling strategy, 

This means that vault depositors sell put options while depositing sufficient cash reserves (such as $USDC) as collateral to cover potential selling risks. 

Vault Depositors (Put Sellers) can immediately harvest their Reward (Premium) under Typus Vaults upon each auction ends. 

If the market price of the underlying (such as $SUI) is lower than the Target Price (Strike Price) on the expiration date, the put buyer (vault bidder) will exercise the put option and get the cash reserves from the depositor's collateral. Under cash settlement, the amount is equal to the difference between the market price and the target price (strike price) at expiry.

This strategy could help vault depositors increase their returns in a neutral or bullish market movement, while help vault bidders increase their returns in a bearish market movement.

In a Call Spread strategy, 

This means that vault depositors net sell call options while depositing the corresponding underlying asset (such as $SUI) as collateral to cover potential net selling risks. 

Vault Depositors (Call Spread Sellers) can immediately harvest their Reward (Premium) under Typus Vaults upon each auction ends. 

If the market price of the underlying (such as $SUI) is higher than the higher Target Price (Strike Price) on the expiration date, the call spread buyer (vault bidder) will exercise the call spread, and the call spread seller (vault depositor) needs to net sell underlying assets (depositor’s collateral) to the call spread buyer (vault bidder). Under cash settlement, the amount is equal to the net difference between the market price and two target prices (strike prices) at expiry.

This strategy could help vault depositors increase their returns in a bearish market movement, while help vault bidders increase their returns in a bullish market movement.

The non-linear return of Options enables us to create a variety of option strategies by combining call and put options with different strike prices and expiration dates. Investors can utilize options to express their views on Delta, Gamma, Theta, Vega, and Rho.

Typus' strategic partners, Vaulters, will offer diverse strategy vaults and guide users on the market conditions that are suitable for each vault to fulfill their individual needs. 

Stay tuned for more Typus Option Strategies!

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