August 8, 2022

Navigating Atlantic Straddles

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Navigating Atlantic Straddles

This article’s purpose is to help Users navigate the Dopex Atlantic Straddle product. An Atlantic Straddle is a tool that Users can use to purchase a 1-Click Straddle Strategy in order to bet on the volatility of a certain asset.
Every purchase comes with a pre-determined expiry date which is the only moment at which the options can settle. Settlements are automatic and don’t require any manual work. After expiry, all that is required from the User is to withdraw.
Note that writers can deposit at any time during an epoch, but that the deposits will only get accounted for on the next epoch. Writers can also leave their funds inside the Straddle vault as they will roll over automatically to the next epoch for a continuous stream of yields.
For more on how Atlantic Straddles work, feel free to visit our Straddle Article Here.

Now! The official walkthrough

  1. As Usual, First things first, connect yourselves to the Arbitrum network and head on over to the Atlantic Straddles page by clicking “Here”. The link can also be found on our main page by navigating to the top left corner of the page indicating “Straddles” and clicking on it.
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  2. Once you are on the Atlantics Straddle page, you will notice that there are a few key data points that will better define the parameters of this Strategy.
    Let’s go over what we’re seeing.
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To Write Atlantic Puts (AP)

  1. Connect your wallet
    Before being able to write any options, you must click the “Connect Wallet” icon which will prompt you to connect your wallet to the Dopex application.
    customMake sure you are on the Arbitrum chain.
  2. Choose the amount of USDC to deposit
    Since you are writing Atlantic Puts, you are required to deposit USDC.
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    If you are happy with the deposit amount, click the deposit button and sign the transaction (requires gas). If this is your first time writing an AP, you will be required to approve the transaction first (requires gas).
    Note that you are not required to choose a strike price when writing an AP for Atlantic Straddles since they are always written ATM. This means the strike price will be taken as the spot price of ETH at the time the AP is purchased.
  3. View your current AP Deposit
    When your deposit successfully goes through, the ‘Deposits’ section on the left-hand side will show your deposit amount as well as any premiums you have earned.
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Withdrawing AP deposits

When you wrote your AP, you would have caught a section mentioning “Auto Rollover configured”.
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This means that if you do NOT withdraw your USDC from the AP vault, whatever balance you have remaining will be carried forward to the next epoch in order to continue writing APs for new purchasers.
Let’s take a look at how to go about withdrawing your funds.
  1. Queue withdrawal for your AP Deposit
    Click on “Queue withdrawal” which is situated in the “Deposits” section of the Atlantic Straddle landing page.
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  2. Select withdrawal option
    This will open the following page which gives two withdrawal options:
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  • Delegate Withdrawal: this option is available at any time and will instruct the contract to automatically send funds to your address when the epoch expires.
  • Withdraw manually: this option will only be available in the period between the expiration of one epoch and the beginning of another and allows you to withdraw funds to your wallet immediately.
Incredible work, students!
Now you know how to Write APs and Withdraw AP Deposits.

Purchasing an AP for an automated Atlantic Straddle Strategy (AP)

  1. Connect your wallet
    You can do so by clicking the “Connect Wallet” icon which will prompt you to connect your wallet to the Dopex application.
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    Make sure you are on the Arbitrum chain.
  2. Choose amount of options to purchase
    Atlantic Straddles consist of Atlantic Puts, thus why purchases are made in USDC/USDT.
    Every “Straddle” purchase amounts to ~ one 0.5 $ETH notional call and one 0.5 $ETH notional put for a total of 1 ETH notional
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    If you are pleased with the price for the number of options you would like to purchase, click the purchase button and sign the transaction (requires gas). If this is your first time buying an AP, you will be required to approve the transaction first (requires gas).
    Note that you are always purchasing an ATM AP for Atlantic Straddles thus why choosing a strike is not required. In other words, the strike price will be taken as the spot price of ETH at the time the AP is purchased.
  3. To view your current Positions
    When your purchase successfully goes through, the ‘Position’ section at the bottom of the page will show you your different purchases and the data within them ->e.g. the Amount purchased - At which strike - drop-down epochs - and the withdraw button which will show available at expiry
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Withdrawing at expiry

At the settlement of the option, the withdraw button underneath “action” in the positions section of the page will become available.
This is where you can manually withdraw your gains from the present as well as past epochs by simply choosing the epoch and going through a simple wallet transaction by clicking the “withdraw button” (requires gas).
That's it! And remember to always do your due diligence, with that said, we wish you a good one lads!

About Dopex

Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers — all in a passive manner. Dopex uses option pools to allow anyone to earn a yield passively. Offering value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expiries. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.

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