Introduction
Hegic Options Trading Protocol Documentation
Last updated
Hegic Options Trading Protocol Documentation
Last updated
Hegic is decentralized on-chain options trading protocol. It is based on a peer-to-pool AMM model, and in contrast to other options markets where a buyer and seller are involved in Hegic, the seller takes the position through a Stake&Cover pool.
You can buy BTC or ETH call and put options, as well as multiple one-click strategies depending on market sentiment (bullish, bearish, low or high volatility) as an individual buyer. All options are settled in USDC.
With Hegic you can trade 24/7 American, cash-settled, on-chain ETH and WBTC call/put options, and one-click multi-leg strategies, with no KYC or registration required for trading.
Hegic options are American options, which means they can be exercised at any time before expiry of the option (with the exception of Inverse strategies).
What is the point of options trading in general, and why would people trade options? Here are some of the reasons:
HEDGING Hedging with options allows traders to reduce risk
YIELD Similar to yield farming, options can be used to earn yield or generate an income in any market condition
LEVERAGE Options have similar market exposure to owning an asset, but require less money, allowing for more leverage and flexibility for your portfolio.
SPECULATION You can speculate on the future price of an asset, whether it goes up, down, or trades within a range
There are two main strategies for market participants: buying (option buyer) and providing liquidity (through Stake&Cover pool). Buyers buy options for ETH and BTC, while liquidity providers are providing $Hegic in S&C pool and are participating in the protocols PnL distribution. More details on both in their separate pages.
Hegic is founded and run by solo anon dev Molly Wintermute. Read about her account of how Hegic was conceived and early struggles here.
