How It Works
The transition from Stock Token exposure to premium, capped upside and expiry settlement.
#Conceptual flow
#Every transition
- Stock Token exposure — identify the canonical contract, multiplier and economic units.
- Select expiry — expiry defines how long the option obligation lasts and when the terminal payoff is evaluated.
- Select strike — the strike defines the price above which further upside is transferred to the call side.
- Covered-call exposure — pair or replicate the long exposure with a short-call payoff.
- Premium — deduct execution and settlement costs from gross premium to obtain the net amount.
- Expiry / settlement — observe the terminal state and apply the disclosed payoff and asset accounting.
#Operational terms
- Settlement asset and transfer sequence.
- Pricing and execution path.
- Price-source hierarchy and stale-data handling.
- Early exit and secondary liquidity.
- Fees and net premium accounting.
- Corporate actions and exceptional market states.