Put-Sell Mode
- 1.Initial ETH spot price= $1,200
- 2.The user deposits 1,000 USDC into the put-selling wheel vault at the start of the epoch
- 3.The strike price of the short put option = $1,100
- 4.Yield per epoch = 20%
- 5.The user does not initiate a withdrawal
- 1.The put sell option expires worthless
- 2.Active position= 1,000 USDC
- 3.Profit = yield per epoch = 1,000 USDC x 20% = 200 USDC
- 4.Post settlement balance = 1,000 USDC (active position) + 200 USDC (profit) = 1,200 USDC
- 1.The put-sell option is exercised
- 2.Active position= 1,000 USDC
- 3.Profit = yield per epoch = 1,000 USDC x 20% = 200 USDC
- 4.Post settlement balance of the active position = 1,000 USDC / $1,100 (strike price) = 0.9091 ETH (4dp)
- 5.Post settlement balance of the profit = 200 USDC / $1,050 (settlement price) = 0.1905 ETH (4dp)
- 6.Total post settlement balance = 0.9091 ETH + 0.1905 ETH = 1.0996 ETH (4dp)
- 7.The wheel vault then automatically changes from put-sell to covered call-selling mode
- 8.The user would now have a 1.0996 ETH active position in the covered call wheel vault and is earning yield in the form of ETH.
Last modified 7mo ago