FAQ
What are CLAMM Options?
CLAMM Options is a novel solution for on-chain options trading. It offers liquidity providers a platform to utilize v3 liquidity on PancakeSwap for selling options, enabling them to earn standard trading fees, premiums, and additional rewards. Traders can leverage this liquidity to trade American-style options on a variety of tokens.
What markets are available at launch?
Initially, we will launch on Arbitrum and offer markets for ETH/USDC, wBTC/USDC, and ARB/USDC. Additional markets will be gradually introduced, to enable option trading for all tokens in the future.
How do CLAMM Options benefit liquidity providers (LPs)?
CLAMM Options allow LPs to deposit v3 liquidity on PancakeSwap through Stryke (formerly Dopex), unlocking inactive capital while offering superior yield compared to standard DEX LPing. By becoming a CLAMM LP, you gain far more efficient utilization of your liquidity with minimal opportunity cost, as unutilized liquidity remains in its original AMM, eligible for standard trading fees. While the liquidity utilized for selling options earns high premiums with a similar payoff as a CLAMM v3 liquidity position.
What happens to unutilized liquidity as a CLAMM Options LP?
If your liquidity remains unutilized, it stays in PancakeSwap v3 pools, ensuring no opportunity cost relative to normal v3 LPing. However, when options buyers utilize your liquidity, it is withdrawn from PancakeSwap, and reserved, and you earn a premium paid by options traders.
What are the key benefits of CLAMM Options for LPs?
Positions remain on the underlying AMM if unutilized, allowing continued earning of trading fees.
Options Premiums earned are significantly more lucrative than standard trading fees.
Out-of-range v3 liquidity that doesn't earn trading fees becomes eligible for premiums.
CLAMM LPs have identical exposure as standard LPing.
What features do CLAMM Options offer for traders?
Instant fills for both long and short option positions through accessibility to deep on-chain liquidity.
Ability to close positions at any time (American-style options).
Portfolio margin for superior capital efficiency.
One-click option strategies for streamlined trading.
What advantages do CLAMM Options provide in terms of strike prices and expiries?
CLAMM offers a significantly wider range of strikes, utilizing any tick as the strike price. This grants traders more flexibility in hedging or speculating on prices. Additionally, traders can enjoy expiries ranging from 1 hour to 24 hours.
How do American-style options benefit traders?
American-style options allow traders to close their positions at any time before expiry. This flexibility empowers traders to manage their positions more effectively, enhancing their trading experience.
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