Buy
Purchase call options and get a right to buy NFTs at a specific price, up until a specified date.
Last updated
Purchase call options and get a right to buy NFTs at a specific price, up until a specified date.
Last updated
By purchasing NFT call options, NFT investors can lock in a price at which to buy the NFT in the future. If the floor price rises above the specified price on the expiration date, options buyers can take the NFT and sell it on the market for a profit, otherwise they only lose the small premium.
Browse to the "Buy" section and choose a collection for the NFT options you want to buy.
Select one of the NFTs listed that you want to open a call option on and set the strike price and expiration date on the right panel. Then you can preview the total premium of the call option, press "Buy" button on the right panel to finalize the transaction.
Note that when you select multiple NFTs to open call options, you will get multiple options positions at the same strike price and expiration date.
Due to the preference of the option seller, the buyer can only choose a range of strike prices and expiration dates.
Before purchasing NFT options, you should understand exactly what these terms mean:
Strike Price: An NFT option gives the holder the right to buy or sell a particular NFT at a specified price (the strike price) for a certain period of time.
Expiration Date: Options don’t last forever, though, they have an expiration date. After this date, the holder can no longer buy the NFT at the strike price and the option is worthless.
Premium: The option premium is the total amount that options buyers pay for an option. The option premium is higher for NFT collections with higher floor price volatility in the recent past.
Please remind that the minimum premium is 0.001 ETH for each NFT option, you can open a position when the premium is below 0.001 ETH.
When you open positions on multiple NFTs by submitting a batch transaction, errors may occur on NFTs that do not meet the required limits, and the premiums will be refunded to your claimable balance.
Learn more details about options terminology.
There are also some related concepts about the range in which you can choose strikes and expirations:
Minimum strike price gap (Min. price gap): The minimum strike price increase that option buyers can choose when opening a call option on your NFT. Now the gap between the strike price and the current floor price is allowed to be set to 0%, +10%, +20%, +30%, +50%, and +100%.
Minimum strike price (Min. price): The lowest strike price that option buyers can choose when opening a call option on your NFT. This is an absolute value denominated in ETH.
Maximum expiration duration (Max. duration): The longest expiration duration that option buyers can choose when opening a call option on your NFT. Now it can be set to 3 days, 7 days, 14 days, and 28 days.
After purchasing a call option, you can find your position in the "Positions" section.
NFTCall's options contracts combine features of American and European options. You cannot exercise the option during the first half of the period before the expiration date. But during the second half of the period, you can exercise at any time before the option expires.
Before the expiration date, you can choose whether to exercise the option at the strike price. If you choose to exercise, you needs to pay the option seller ETH equivalent to the strike price, and the trade completes with the transfer of the underlying NFT from the options seller to your wallet.
If you do nothing before the expiration date, when your option expires, the options contract becomes worthless and unlocks the underlying NFT.
Let us introduce the concept of a payoff graph. Payoff graphs are a great instrument to help gain an intuitive feel for options profit and loss.
You pay a fee to purchase a call option, called the premium. It is the price paid for the rights that the call option provides. If at expiration the underlying NFT is below the strike price, you will lose the premium paid. This is the maximum loss.
If the underlying NFT's current floor price is above the strike price at expiration, the profit is the difference in prices, minus the premium. The profit could be unlimited.
For example, if BAYC's floor price is trading at 110 ETH at expiry, the option contract strike price is 100 ETH, and the options cost the buyer 2 ETH, the profit is 110 - (100 +2) = 8 ETH.
Now, if at expiration BAYC's floor price is trading below 100 ETH, obviously the buyer won't exercise the option to buy the NFT at 100 ETH, and the option expires worthless. The buyer loses 2 ETH — but that's all. That's the beauty of options: You're only out the premium if you decide not to play.
