Hegic is a peer-to-pool option trading protocol that allows users to trade in options in a decentralised way.
Hegic works quite simply with the participation of two components, writers and buyers:
Hegic Protocol Overview
In traditional finance, one of the most important pieces of derivative products can be mentioned is options.
A simple option is a contract that allows a holder to exercise a call or put option at a predetermined price in the future with the main purpose of minimising the risk (hedging) or speculation.
The simple structure of an option includes 8 components:
- Premium: Cost for 1 Call / Put option.
- Strike Price: The contract will be executed at this price.
- Break-Even Price.
- Writers: Seller’s options at the strike price.
- Expiry Date: Time the option takes effect to exercise.
- Settled: Profit is paid in what?