Put Pair Contracts
Description of the Puts Pair Core contract, methods and functions
A Hedgey Puts Smart Contract is a protocol for peer to peer put options trading. Each pairs contract is unique for a single asset currency and payment currency. The Asset currency is the underlying asset that the options are written against, and the payment currency is the currency for which premiums are paid, and the strike is based on. Once a pair has been created by the factory, then anyone may create options on the contract. Hedgey Puts deal almost exclusively with the payment currency for escrow, unlike their calls counterpart.
First the key parameters that define any call option
  • Address "short" - this is the put writer, or the "short position"
  • uint "assetAmt" - this is the quantity of the underlying asset currency
  • uint "strike" - this is the price at which the put buyer can sell the underlying asset for, denominated in the payment currency and is independent of the size of the assetAmt
  • uint "totalPurchase" - this is the (strike * the asset amount) to render the exact amount of payment currency the put buyer would receive when selling the asset amount to the short
  • uint "price" - this is the premium price that buyer must pay to the writer to open the contract
  • uint "expiry" - the second when the put agreement expires and can no longer be exercised by the buyer
  • bool "open" - defines if the put agreement is open, meaning a match has occurred where a buyer has paid the seller and both are locked into the contract. The seller can no longer exit their position directly, it has become an obligation.
  • bool "tradeable" - this defines whether the agreement can be bought or sold (both primary and secondary market)
  • address "long" - this is the put buyer, or the "long position"
  • bool "exercised" - this defines if the put agreement has been exercised by the put buyer
There are two ways to generate a new put option:
  1. 1.
    As a potential seller - you can create a "new ask". A new ask is the method which you are acting as the potential put writer, and asking for someone to take the other side and buy your put agreement. When someone buys your put, they pay you the premium for the right to sell the underlying asset, at which point the put is now Open.
  2. 2.
    If you are looking to purchase a put, you can place a "new bid" into the market. When another party who is on the opposite side agrees with your terms, they can sell you the put agreement, at which point the option is Open.
For the remainder of the documentation we will broadly refer to the asset currency as "token" , the totalPurch as total purchase and payment currency in general as "cash". In addition we will refer to the put writer as the "short" or "writer", and the put buyer as the "long" or "owner".
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