Earn (making a market)

An Earn account answers traders' requests with option prices. A maker earns its spread and the holding cost on the options it has written (less the venue's 10 %). A maker pays no trading fee.

Two ways to earn#

• TLP — one deposit makes a market on the listed assets for you. It goes to the largest markets first (each at least $250). The venue runs the quoting program for you: it answers every request at the oracle venue's own bid and ask. One Provide / Take out acts on all of them.
• Custom — bring your own pricing model. You run your own quoting program (yourself or through an agent, signing with your wallet): the venue sends it each request and it answers with a firm, signed quote — or stays silent. The Earn tab gives you a ready agent prompt. The venue does not price it for you.

How fills reach you#

The venue broadcasts each request (asset, strike, duration, size) to every maker's program; you see the request, never who sent it. Each answer is a firm quote: signed, for the whole size, with an expiry and a nonce, so it cannot be pulled after it wins. The single best quote among makers with room wins; if that is you, you fill the whole piece at your own price. There is no sharing of a fill between makers. So:

• quoting a better price than the others wins the flow; quoting the same price, the maker with more room wins;
• your room is what your caps and your deposit allow; an order bigger than your room cannot go to you (it goes to someone who can take it whole, or is split into pieces by the taker).

The price limit#

A quote only counts if it sits inside a price limit around the oracle venue's prices. With h = half the oracle venue's spread: an ask counts if it is between the oracle bid and the oracle ask + h; a bid counts if it is between the oracle bid − h and the oracle ask. A quote outside the price limit never fills.

Crossed quotes are the makers' risk#

There is no crossing breaker. If one maker's bid is above another maker's ask, a trader can buy from one and sell to the other. That is the makers' risk, as at Deribit Block RFQ, Derive and Paradigm. The price limit bounds it: such a round trip can gain at most the oracle venue's own spread, before fees. Quote inside your view of the market.

Caps, margin and liquidation#

Each side has a cap in coin (how much you will be net short of calls, and of puts). At the cap that side stops quoting and comes back as exposure falls. A cap is a size limit, not a loss limit: losses are bounded by margin. Your sold options are margined by the same closed form as a trader's (Wallet & accounts) at their mark (the oracle venue's closeable side). An Earn account at its maintenance margin is liquidated like any other.

Closes and holding costs#

When a trader closes, the position goes back to its writer of record — the maker who wrote it — at the market's best closing price, whether or not that maker is still quoting. That is a term of making markets here, and it means every close lowers open interest. Holding costs (the roll) settle between the holder and the writer at the oracle venue's ask; notional decay sells back at the bid. A maker that cannot pay what it owes is liquidated and its side moves to another maker; the trader's position is untouched.

Names#

You see your own quotes, fills and positions, and the aggregate. No maker's name, room or count is ever shown, and nobody sees yours.

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