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Price Optimization
As a market maker you can create a pool and configure a unique strategy that you or anyone else can provide liquidity to. Being a market maker allows you to sell options using your own strategies.
These are some examples of varying approaches that could be used:
    Custom pricing function
    1 pool with many assets
    1 pool with 1 asset
    Puts or calls only
    Expiry time range
    Strike price range
    Oracle price range
    Option size
    Different collateral or hedge token
    Hedging strategy
The pool that provides best price for a given oracle is what is offered to purchase.
The market maker guide covers the steps & technical details for how you could implement them.

Custom pricing function

The default pricing function is based on the pool utilization and the ratio or puts/calls. A pool can be customized to use any function that implements the IFees interface.
The default function may be useful to create new option markets as the historical volatility can be set to create a base for the price and then the price fluctuates from there based on demand.
Implementing a custom pricing function would allow you to make markets that match specific ranges or price/strike/direction/volatility/size etc.

1 pool with many oracles

A pool can be customized to sell options for one or many oracles.
Linking many oracles might make sense where there are underserved markets so they can all share a single deep liquidity pool.
The pricing function can be adapted to provide custom pricing for each oracle if required.

1 pool with 1 oracle

A pool can be customized to only sell options for a single oracle.
Creating a pool that only provides options for a single or small group of correlated assets should allow for accurate pricing for that asset.

Sell puts or calls only

A pool can be customized to only selling puts or calls.

Specific expiry lengths

A pool can be customized to only selling options for specific expiry lengths.

Different hedge token

Optyn liquidity is stored in Uniswap V2 compatible swap pools. One of the tokens is the collateral token which is what is used to pay premium and payout profitable trades. Any other token can make up the pair.
A pool can specialize by creating a pair with a different hedge asset.

Delta hedging strategy

You may have a strategy where you can delta hedge more effectively either off chain or using some other techniques.
Last modified 1mo ago