Call Option

Call options are financial contracts that give buyers the right but not the obligation to buy the NFT.

On DoubleWeb3 Decentralized NFT Option trading platform, you can buy or sell an NFT option.

Let's assume the current floor price of a BAYC is 80ETH. Call options give the holder the right to buy 1 BAYC at 100ETH, known as the strike price (exercise price), up until a within 30 days, known as the duration, with the price of 0.1ETH, known as the premium.

Buying a call option

There are many cases we will want to buy a call option. For instance, a trader is bullish in his market view and expects the market to rise in the near future. He can buy a call option that has a limited risk (max loss is the premium paid) and unlimited profit potential.

Another example is when we want to sell an overhyped NFT, but at the same time, we are afraid of missing out the peak. We can choose to sell the NFT and buy a call option. If the price skyrocket later, you can exercise the contract and buy back the NFT at a low price.

To buy a call option, you will need to pay the premium to the seller immediately; this is a non-refundable fee. After paying the premium, you will have the right to buy the NFT inside the contract at the strike price anytime before the contract expires.

Creating an offer

Apart from buying an option contract from sellers directly, you can create an offer with your desired terms. Because of our off-chain order book, creating an offer doesn't require any gas, and the offer will expire automatically.

Selling an option

Selling a call option is known as "short call", this is a commonly used strategy in the financial world. A Short Call is best used when you expect the NFT to fall moderately, or to remain at the same level.

To sell a call option, you will need to deposit an NFT into the smart contract with your desired settings. After setting up the contract, you can always change the settings later.

Accepting an offer

You can also accept an existing offer and receive the premium immediately without waiting a buyer.