Sushi Options on Primitive

Hello everyone! It’s nice to be here.

I am the founder of Primitive, a permissionless options protocol.

Today, Primitive announced new option markets which include:

  • $30 Sushi Call expiring September 24, 2021.
  • $2.50 Sushi Put expiring September 24, 2021.

Twitter post

These are powered by Sushiswap pools too!
Short option (RDM) - SUSHI Sushiswap $30 Call Pool

Short option (RDM) - DAI Sushiswap $2.50 Put Pool

These options allow users to hedge their positions, or speculate further with the calls. They also give users the opportunity to write puts or calls, to generate some returns on either DAI (for puts) or Sushi (for calls).

The option pools contain the Short option token (called RDM) and the underlying token (Dai for puts, Sushi for calls). We’ve designed the pool to mitigate exposure to option risk. When an LP enters the pool, they start with a neutral option position. This is because short option tokens are provided to the pool as liquidity, while long option tokens are held in the LPs wallet (the hedge against the short). Over time, if options are bought, the LP will gain more short exposure than their long option hedge covers, and if options are sold the exposure goes in the other direction. Overall, if the option expires OTM and is not exercised, there is no impermanent loss.

LPs earn the option trading fees.

If you have more questions, I’d be happy to answer them! This is another tool that can be used to manage your valuable Sushi.