Honey Call Options are Live on Hedgey Finance

Having passed the proposal to add Hedgey to the 1Hive treasury Management toolkit, 30 HNY has been added to Hedgey via call options and are now available for anyone to purchase.

Why are we doing this?
Selling call options allows us to build a stablecoin treasury for 1Hive in a decentralized way and without putting sell pressure on our beloved HNY token. Building a stablecoin reserve gives us insurance to help withstand market downturns out of our control, and gives us the ability to fund future proposals with stablecoins, should we decide we want that option in order to avoid HNY being sold to cover expenses.

Why buy call options:
People buy call options to have increased positive exposure to a token during price increases. Call buyers make profits when their contracts go above the “strike” price for that contract. More tokens in a contract = more profits when it rises above the strike price. Call options are also attractive because your maximum loss risk is only the price you pay for the premium.

The benefit for 1hive Treasury:
For 1Hive, selling call options will generate xDAI for treasury management when the contracts are purchased, as well as additional xDAI if the contracts are exercised, all without any price-reducing sell pressure on HNY in Honeyswap.

The benefit for community:
Call options are an additional way to get exposure to HNY during price increases. These contracts are good until their expiration.

How to buy HNY call options:
You can view available call options for HNY and purchase at: Hedgey Moon Market

After you buy call options:
If you buy a call option, it will exist in your portfolio page at Hedgey | Decentralized Options Trading. You can resell an option at anytime before it expires or exercise it (take the profits) if it goes above the strike price.

When you purchase an option it will have an expiration date. Your option will be valid until this date.

More information at: Understanding Call Options - Hedgey

Big thanks to @iceman @hedgehood @solarmkd @D0SH and @ceresbzns for their roles in bringing this to fruition!

14 Likes

This is super cool. I had first got whiff of this when @D0SH retweeted the announcement from Hedgy. I have only scratched the surface of options, but do not know enough about them. I guess as we do this collaboration, may be we should also look at educating 1Hive users (through a bounty?? - Simple article/ video/tictok??) about the Options - benefits and risks especially in volatile markets. I know there will probably a lot of people that say that investment is an individual choice and everyone needs to make their own decisions, but i feel strongly about educating users especially when we give them the exposure/opportunity to experience DeFI.

4 Likes

This is incredibly great. I’ve been using Omen’s liquidity pools to create a type of options-like experience, but this UI is stellar and platform is great. A definitely worthy project to be sending over some HNY to experiment with. I’m in for a few HNY call options.

3 Likes

Just ran some numbers and bought some calls. Awesome stuff! Nice way to get leverage without margin.