About Capped Options
Amoeba Farm starts with capped options because hardware input markets are not ideal for liquidation-heavy products.
Hardware prices can update slowly, change in jumps, or require evidence windows. A capped monthly option lets the user know the maximum loss and maximum payout before entry.
The Basic Idea
Section titled “The Basic Idea”A capped option pays from a market movement, but only up to a defined maximum.
For a buyer, the key questions are:
- What market am I trading?
- What month or expiry?
- What direction?
- What premium do I pay?
- What is my maximum loss?
- What is my maximum payout?
- When does it settle?
Why the Cap Matters
Section titled “Why the Cap Matters”The cap makes the risk easier to inspect.
Buyers know the most they can lose. Writers know the worst-case payout they are backing. The market does not need to pretend that hardware input prices can support constant liquidation checks.
Calls and puts
Section titled “Calls and puts”A capped call is an upside view. A capped put is a downside view. Both flatten at a published maximum gross payout.
For the current neutral Devnet pair at a $100 anchor, the call covers $100 to $112 and the put covers $100 to $88. Participation is 1.0, so each has a $12 maximum gross payout per one-unit contract.
Tiny Example
Section titled “Tiny Example”A RAMX call spread might show:
| Field | Example |
|---|---|
| Market | RAMX |
| Expiry | Published monthly |
| Direction | Upside |
| Premium paid | 3 USDC |
| Maximum loss | 3 USDC |
| Maximum gross payout | 12 USDC |
| Maximum net gain | 9 USDC before fees |
| Liquidation | None |
The premium is an example only and remains market-discovered. A live trade preview must show the actual premium, separate fee, maximum loss, maximum gross payout, and settlement date before confirmation.
Where options come from
Section titled “Where options come from”Primary buyers bid in a funded collective writer auction. Accepted premium becomes locked sleeve funding. After issuance, users trade existing claims through the native Amoeba DLMM.
Settlement
Section titled “Settlement”At expiry, every series in one sleeve uses the same canonical settlement-group result and its published payoff rule.
The oracle computes the market movement. The contract computes the payout.