🎁Basic Vaults

FABNT Vaults: Empowering Options Trading with Simplicity and Flexibility

FABNT Vaults Overview:

FABNT Vaults revolutionize the options trading landscape by offering users a simplified and flexible platform to engage in options trading. These vaults enable users to sell out-of-the-money (OTM) European cash-settled options to accredited market makers, generating yields in the form of option premiums. With pre-defined parameters, FABNT Vaults abstract the complexities of option design, making it easier for users to participate in this lucrative market.

FABNT Vault LP Tokens: Unleashing the Power of Short Volatility Instruments. FABNT Vaults introduce the concept of FABNT Vault LP Tokens, representing short volatility instruments in the form of short call or short put positions. These tokens empower users to explore various trading strategies and opportunities. Let's delve into their functionalities:

Selling Covered Calls (Short Call): FABNT Vaults offer users the ability to sell covered calls, a strategy designed to generate income. By selling covered calls, users can capitalize on market opportunities and earn option premiums.
Selling Cash-Secured Puts (Short Put): FABNT Vaults enable users to accumulate the underlying asset by selling cash-secured puts. This strategy allows users to acquire assets at potentially discounted prices while earning option premiums.

FABNT Vault Collateral Denominations: FABNT Vaults utilize specific collateral denominations based on the instrument:

For calls: Collateral is denominated in the underlying asset (e.g., $XYZ).
For puts: Collateral is denominated in $USDC, a stablecoin.

FABNT Vault Auctions & Settlement: Similar to Thetanuts Finance, FABNT conducts blind auctions for its vaults off-chain. Accredited market makers participate in these auctions, bidding to purchase the option contracts sold by the FABNT Vaults. The winning market maker then deposits the option premiums upfront into the respective FABNT Vault.

Upon Contract Expiry:

Settlement Price: FABNT references major centralized exchanges, such as Deribit Index for majors, Binance Spot for altcoins, and others for longer-tail assets, to determine the settlement price. This price determines whether the option contract has been struck.
Settlement: FABNT Vaults settle with the winning market maker of each epoch based on whether the option contract is struck.

FABNT Vaults in Action: FABNT Vaults introduce the concept of fungible and transferrable tokenized positions, represented by FABNT Vault LP Tokens. Here's how users can utilize these tokens:

Provide Liquidity on the Lending Market: Users can deposit FABNT Vault LP tokens into the Lending Market, generating additional lending interest. This feature allows users to maximize their yield potential and explore diverse lending strategies.
Provide Liquidity on the Automated Market Maker (AMM): FABNT Vault LP tokens can also be deposited into the AMM, enabling users to generate additional AMM trading fees. By providing liquidity, users can actively participate in the vibrant trading ecosystem and benefit from trading activities.
Go Long: Users interested in a long volatility position can borrow FABNT Vault LP Tokens from the Lending Market and sell them on the AMM. This represents a long call or long put position, allowing users to capitalize on market movements.
Instant Closure of FABNT Vault Positions: FABNT Vault LP Token holders have the flexibility to sell their positions on the AMM, instantly closing their short call or short put positions. This feature eliminates the waiting period until the end of the FABNT Vault epoch, providing users with greater control over their trading strategies.

Conclusion: FABNT Vaults empower users by offering a simplified and flexible options trading platform. With pre-defined parameters and versatile FABNT Vault LP Tokens, users can easily engage in options trading, generate yields, and explore various trading strategies. Join FABNT today and unlock the potential of options trading with simplicity and flexibility.

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Last updated 11 months ago

FABNT Vaults Overview:

Selling Covered Calls (Short Call): FABNT Vaults offer users the ability to sell covered calls, a strategy designed to generate income. By selling covered calls, users can capitalize on market opportunities and earn option premiums.

Selling Cash-Secured Puts (Short Put): FABNT Vaults enable users to accumulate the underlying asset by selling cash-secured puts. This strategy allows users to acquire assets at potentially discounted prices while earning option premiums.

FABNT Vault Collateral Denominations: FABNT Vaults utilize specific collateral denominations based on the instrument:

For calls: Collateral is denominated in the underlying asset (e.g., $XYZ).

For puts: Collateral is denominated in $USDC, a stablecoin.

Upon Contract Expiry:

Settlement Price: FABNT references major centralized exchanges, such as Deribit Index for majors, Binance Spot for altcoins, and others for longer-tail assets, to determine the settlement price. This price determines whether the option contract has been struck.

Settlement: FABNT Vaults settle with the winning market maker of each epoch based on whether the option contract is struck.

FABNT Vaults in Action: FABNT Vaults introduce the concept of fungible and transferrable tokenized positions, represented by FABNT Vault LP Tokens. Here's how users can utilize these tokens:

Provide Liquidity on the Lending Market: Users can deposit FABNT Vault LP tokens into the Lending Market, generating additional lending interest. This feature allows users to maximize their yield potential and explore diverse lending strategies.

Provide Liquidity on the Automated Market Maker (AMM): FABNT Vault LP tokens can also be deposited into the AMM, enabling users to generate additional AMM trading fees. By providing liquidity, users can actively participate in the vibrant trading ecosystem and benefit from trading activities.

Go Long: Users interested in a long volatility position can borrow FABNT Vault LP Tokens from the Lending Market and sell them on the AMM. This represents a long call or long put position, allowing users to capitalize on market movements.

Instant Closure of FABNT Vault Positions: FABNT Vault LP Token holders have the flexibility to sell their positions on the AMM, instantly closing their short call or short put positions. This feature eliminates the waiting period until the end of the FABNT Vault epoch, providing users with greater control over their trading strategies.