Options

This page describes options on MetaFlux: the two kinds, escrow, fees, settlement, listing and the reads.

Overview

A MetaFlux option is a standard European, fully collateralized contract on a listed underlying. It trades through RFQ only. There is no option order book.

• The holder pays the premium at the fill. That is the full requirement. An option position has no margin, no mark price and no liquidation.
• The writer locks the worst case at the fill. This lock is the escrow. It stays in the series pot until the position closes or the series settles.
• A put settles in USDC. A call settles in the underlying coin. Every row gives the denomination as settle_asset. Read it. A client that assumes dollars is wrong about every call.
• The chain never computes an option price and never needs an implied volatility. The premium is the price on which two accounts agree in an RFQ.

Read the active series from option_series. Trade them with rfq_request, rfq_quote and rfq_accept.

Option kinds

A series is one (underlying, expiry, strike, kind) tuple. Exactly two kinds exist. S* is the settlement price and K is the strike.

Kind	Wire value	Payoff per whole unit	Escrow per whole unit	settle_asset
Put	"put"	max(K − S*, 0) USDC	K USDC	"USDC"
Call	"call"	max(1 − K / S*, 0) COIN	ONE coin	the underlying's token, e.g. "BTC"

Both kinds are European. You cannot exercise either one before expiry. To close a position early, trade it back. Early exercise is not available.

Call escrow

The denomination of a call is forced. It is not a choice.

A cash call pays max(S* − K, 0) in USDC. The price has no ceiling, so that payoff has no finite worst case. No cash escrow can cover it. A cash call therefore needs a margin engine and a liquidation ladder for its writers.

When you read the same payoff in the underlying, it is bounded at every price:

max(1 − K / S*, 0) COIN  valued at S*  =  max(S* − K, 0) USDC

K / S* is above zero, so 1 − K / S* is below one at every price. One coin per contract therefore covers the worst case at any price. This is the covered call that every desk already writes. It lets this lane keep its central promise: both sides are fully funded at the fill, so an option position can never be liquidated.

A call is denominated in the coin, not in dollars

On a call series, escrow_per_unit is "1". The settlement payout is coin, and the refund to the writer is coin. The number "1" is one coin. It is not one dollar.

Read settle_asset on the row. Use it as the currency of escrow_per_unit, of option_state.escrow, and of every amount that settlement moves. A caller that formats those figures as dollars is wrong by the whole asset class on every call.

The premium is the exception. It is always USDC. See premium currency.

Payoff examples

One BTC call, with K = 100,000, settles at S* = 125,000:

payoff = max(1 − 100000 / 125000, 0) = 0.2 BTC per unit
refund = 1 − 0.2                     = 0.8 BTC per unit

At the settlement price, the 0.2 BTC of the holder is worth 0.2 × 125,000 = $25,000. This is exactly S* − K. The coin payoff and the cash payoff have the same economics. Only the currency that the chain can safely escrow is different.

At S* = 100,000 or below, the payoff is 0 and the writer takes the whole coin back.

The put is simpler. One BTC put, with K = 100,000, settles at S* = 90,000. It pays the holder $10,000 and refunds $90,000 of the $100,000 escrow to the writer.

Fill effects

An option fill moves four things and nothing else:

1. The premium goes from the holder to the writer, in USDC, on both kinds.
2. The escrow goes from the balance of the writer into the series pot, in settle_asset.
3. The escrow of a closing writer comes back out of the pot, in settle_asset.
4. The taker pays a trading fee, in USDC. See option fee.

An option fill opens no perpetual position and touches no margin figure. See absent features.

A call writer must hold the coin. The escrow leaves the spot balance of the underlying token of the writer. A spot balance cannot go negative, so to hold the coin IS the full collateral test. The chain reads no margin figure and encumbers no USDC. The chain refuses a writer who does not have enough coin, with insufficient underlying balance for the escrow.

A call escrow cannot net the premium that it earns. On a put series, the incoming USDC premium reduces the USDC that the writer must find for the escrow. The chain checks one net number. On a call series, the escrow is coin and the premium is dollars. The chain checks the two assets separately: first the coin for the escrow, then USDC for the fee. For this reason the chain can refuse a call writer with insufficient free collateral for the fee, while that writer holds every coin it needs.

A close releases the exact escrow. The listing rule puts the strike on an escrow grid. The escrow per unit is therefore a whole number of the smallest committed step of the settlement asset. A partial close releases exactly that rate times the closed units. No rounding residue can build up on the trading path.

A holder who sells back closes first. The chain nets the two legs of each account before it locks anything. An account that holds long units and then writes gives up long units. It does not open a short. A round trip therefore returns exactly what it locked.

Premium currency

settle_asset sets the currency of the escrow and the settlement payout. It does not set the currency of the premium.

Amount	Currency on a put	Currency on a call
Premium (RFQ price × units)	USDC	USDC
Taker fee	USDC	USDC
Escrow	USDC	the coin
Settlement payout and refund	USDC	the coin

An RFQ price is a premium per whole underlying unit in USDC, on the 1e8 plane, for both kinds. Quote a call in dollars. Read its escrow and its payout in coin. A client that divides the premium on the coin plane overstates it.

Option fee

Only the TAKER pays. The taker is the account that sent the RFQ request. It can be the holder or the writer, as a result of the side that it asked for. The quoting maker has no fee leg.

The fee is the SMALLER of two terms. The chain charges it in USDC on both kinds:

fee = min( strike_face x taker_rate ,  premium x premium_cap )

strike_face is strike × size, for BOTH kinds. The strike face is the only notional that the chain can read without a price. The worst payout of a put IS the strike face. A call escrows one coin. To know the dollar value of that coin, the chain would have to fetch a price. The chain therefore uses the strike face as the bound for a call too.

The premium term is the tail guard. A far out-of-the-money option can have a premium far below its strike face. The notional term alone would then charge a fee larger than the option itself. The cap holds the fee to a fraction of the premium that the taker paid. The cap applies rarely, only when the premium is a sliver of the strike face. That is the case for which it exists.

Both terms truncate toward zero, and the smaller one wins. The fee therefore never rounds up.

Both rates are governance parameters. Both start UNSET, which charges nothing. The same ceiling that applies to every other fee rate caps the taker rate at 1% of the notional. Read the current values on /info fee_schedule, in the option row of products.

Size plane

RFQ size is an integer on the 10^sz_decimals plane of the series, exactly like a perpetual order size. Every option_series row gives sz_decimals.

• Wire size = whole units × 10^sz_decimals.
• Premium in USDC = quoted price × whole units.
• Escrow in settle_asset = escrow_per_unit × whole units.

The premium is truncated toward zero to micro-USDC. The chain refuses a fill whose premium truncates to zero. A size that is too small for the quoted price therefore cannot trade for free.

Settlement

At expiry, the chain settles the whole series in one block. It pays from the series pot, and the pot closes to exactly zero.

• Each holder gets intrinsic × units, truncated toward zero.
• Each writer gets a refund of (escrow rate − intrinsic) × units, truncated toward zero.
• The rounding residue is dust. It goes to the insurance fund. It is never a charge on a writer beyond the escrow, and never a shortfall for a holder.

Every amount is paid in settle_asset. A put credits the ordinary USDC account balance. A call credits the spot balance of the underlying token. This is the same balance that a spot trade moves. Dust goes to the insurance fund in that same asset.

The intrinsic of a call divides by S*, so it truncates one more time than that of a put. The truncation always makes the claim of the holder smaller, which is the safe direction. The refund of the writer is the complement, so a charge can never exceed the escrow.

Settlement price

The settlement price is the arithmetic mean of the committed oracle prices whose source timestamp is inside a window that ends at expiry. It is not the last price, and it is not a mark price.

The chain removes duplicate samples by source timestamp. One oracle submission is one sample, however many blocks carry it forward. This keeps the mean independent of the block cadence.

The window needs a minimum number of distinct source timestamps before it can price. The defaults are below. Governance can change each of them by vote.

Knob	Default	Meaning
Window	180,000 ms	Length of the price window before expiry
Minimum entries	20	Distinct source timestamps the window needs
Widening step	one window per 60,000 ms after expiry	How fast a thin window grows
Maximum window	900,000 ms	Ceiling on the widened window
Abandon after	86,400,000 ms	Time after expiry at which the series gives up

Deferral and abandonment

Settlement can defer, and it can abandon

A thin window defers. If the window holds fewer than the minimum number of distinct source timestamps, the series does not settle. It waits and tries again a minute later. Each time, it widens the window by one step. A series that can price always prices, however late the attempt.

A window that never fills abandons. Past the abandon bound, the chain stops the wait. Nobody is paid. Every writer takes their whole escrow back: the whole coin on a call, the whole strike on a put. A holder of an in-the-money option gets nothing. At that point no price is honest, so the chain moves no money on one.

Abandonment is a backstop for a dead feed. It is not a normal outcome. For this reason, a series on a thinly fed underlying has a different risk from a series on a busy one.

Absent features

It has no	Because
Liquidation	Both sides are fully funded at the fill. There is nothing to liquidate
Margin requirement	The holder paid the premium. The writer locked the worst case
Mark price	The chain never prices an option
Order book	The lane is RFQ only. See RFQ
Maker fee	Only the taker pays. The quoting maker has no fee leg. See option fee
Portfolio-margin offset	Options are outside portfolio margin
Early exercise	The style is European. A position closes early by a trade. Exercise is not available
Spread or capped payoff	The chain lists single legs only. Build a spread from two series

Listing a series

A validator vote of ⅔ of stake lists a series. A user action cannot list one, and there is no permissionless deploy. The vote checks three things:

• The underlying is an active market with a fresh price feed.
• The expiry is at least one hour ahead.
• The strike is on the escrow grid.

A call needs an underlying with a spot token. The escrow and the payout are one unit of the underlying, so an account must be able to hold that token. An index market has a price feed but no token of its own. The chain refuses a call on it with a call needs an underlying with a spot token. A put on the same underlying is accepted, because it escrows and pays USDC.

The chain caps how much of the lane one series or the whole registry can hold.

Cap	Value
Active series	1,024
Position rows per series	2,048
Position rows chain-wide	32,768

The chain refuses a fill that would open a new position row past either row cap. A close of an existing row is always allowed.

Reads

Two public reads cover the lane.

Read	Answers
option_series	The active series, the signing_id to sign against, the settle_asset, and the escrow_per_unit that a writer locks
option_state	The holdings of one account: units long, units written, and the escrow it has locked

A fill writes no ledger row of its own. Between the fill and expiry, option_state is the only read where a writer sees the escrow it locked and a holder sees its units.

A position row carries TWO planes and TWO currencies

long and short are unit counts, already on the series size scale. escrow is money, in the settle_asset of that row: dollars on a put, coin on a call. All three are decimal strings. A caller that reads escrow as units, or the escrow of a call as dollars, gets a wrong number that still parses.

The account-wide option.escrow on account_state counts put legs only. It is one USDC number, and you cannot add coins to dollars. option.legs still counts every leg. For the denominations of each series, read option_state.

There is no public read for a series pot yet. The pot moves the same balances that account_state and the spot balances show as they leave and return.

Changes from the bounded call

The lane previously listed ceiling-bounded calls and settled everything in cash. That model is gone. The bounded call is not a kind, and it cannot be listed. Nothing on the chain can express a call spread any more.

Then	Now
kind was "put" or a third token	kind is "put" or "call", and nothing else
A call's payoff was bounded by a listed ceiling C, in USDC	A call's payoff is max(1 − K / S*, 0) COIN
A call escrowed C − K USDC: the width, not the strike	A call escrows ONE coin
The row carried a cap field on those calls	cap is gone, on the row and on the listing action
Every escrow and payout was USDC	The row carries settle_asset, and both follow it
The fee notional on a call was the width C − K	The fee notional is strike × size on both kinds
A call writer needed USDC	A call writer needs the coin

No series is converted. The last bounded-call series settled and retired before the change, so no open position crosses the boundary.

See also

• RFQ: the only way to trade an option.
• option_series: the registry of active series.
• option_state: the holdings of one account in a series.
• /exchange RFQ actions: the field tables and the typed-data primary types.
• Oracle prices: the price source that settlement reads.
• MIP-4: the proposal that started this product.