Thetanuts Finance
Search
⌃K

Deposits Mid-Epoch

When a user deposits mid-epoch, he/she will not be entitled to the yield generated for the current epoch but his/her deposit will become active in case the vault is exercised (similar to a market limit order).

Parameter

  1. 1.
    Initial ETH spot price= $1,200
  2. 2.
    A user deposits 1,000 USDC into the put-selling wheel vault during mid-epoch
  3. 3.
    The strike price of the put-sell option = $1,100
  4. 4.
    Weekly yield= 20%
  5. 5.
    The user does not initiate a withdrawal

Scenario 1: ETH expires at $1,150 (above strike price)

  1. 1.
    The put-sell option expires worthless
  2. 2.
    Active position= 1,000 USDC
  3. 3.
    The user does not receive weekly profit (weekly yield)
  4. 4.
    Post settlement balance = 1,000 USDC

Scenario 2: ETH expires $1,050 (below strike price)

  1. 1.
    The put-sell option is exercised
  2. 2.
    Active position= 1,000 USDC
  3. 3.
    Profit = yield per epoch = 0
  4. 4.
    Post settlement balance of the active position = 1,000 USDC / $1,100 (strike price) = 0.9091 ETH (4dp)
  5. 5.
    Total post-settlement balance = 0.9091 ETH
  6. 6.
    The wheel vault then automatically changes from put-sell to covered call-selling mode
  7. 7.
    The user would now have a 0.9091 ETH active position in the covered call wheel vault and is earning yield in the form of ETH.
Previous
Covered Call Mode
Next
Wheel Vault FAQ
Last modified 7mo ago