For those who have read this thread and are interested, below is the idea more fleshed out. Feel free to give thoughts, ask for clarification, and of course the usual assortment of speculative “this is a scam” posts, as appropriate for the Eve-O forums.
Do excuse syntax and formatting, this is a paste.
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Terminology:
- Option: An agreement to buy or sell something at an agreed price at an agreed date.
- Underlying: The ‘thing’ for which the Option regards. For Instance: The Underlying of a Tritanium Call Option is, Tritanium.
- Strike / Strike Price: The agreed upon price of the Underlying for the Option.
- Expiration Date / Expiry: The agreed upon date of the Option.
- Multiplier: The count of Underlying in the Option. For instance: If an Option is for 1 million Trit, and the cost of the Option is .05 ISK, then the total cost of the Option would be 5000 ISK. (Ask Price x Multiplier).
- Option Price: The Option Ask price in underlying single unit terms.
- Option Cost: The Option Ask price times the number of units – the Multiplier (i.e. for A titanium Option of one million units. Ask is 0.20, multiplier is one million, equating to, 200,000 ISK)
- Closing Price: The in-game Average Price of the underlying from the previous day (The Forge).
- Ammatar Trade Syndicate Average (ATSA): The seven-day moving average of the Average Price as recorded in the in-game market history table in Jita 4-4 Caldary Navy Assembly Plant (The Forge).
- Call Option: An obligation for the seller (me) to sell you Minerals at the Strike Price, if the ATSA is above the Strike Price on the Expiry date.
- Put Option: An obligation for the seller (me) to buy your Minerals at the Strike Price, if the ATSA is below the Strike Price on the Expiry date.
- In The Money (ITM): The Option is in your favor. For instance: If you bought a Call for trit at 10, and the ATSA is at 12, then your Option is In the Money by 2 ISK. I would be obligated to sell you Trit at 10 and you get 2 ISK, per unit of Trit (times the multiplier) profit.
- ATS Reserve (The Reserves): The amount of Underlying and ISK held as a float to accommodate transactions.
- Vault Reserve (The Vault): Underlying assets other players wish ATS to Manage on their behalf. (Don’t know that this will ever come about, so ‘tis a place holder, we’ll see.)
- Eve-Contract: The In-game contract system we all know. This is the mechanism that will be used to transfer the underlying for In The Money Options.
Process
I’ll post, monthly, Options available that expire on the last Friday of the following month in a format such as below:
| Underlying | Availability | Multiplier | Type | Name | ATSA | Strike | Expiry | Ask | Cost |
|---|---|---|---|---|---|---|---|---|---|
| Tritanium | 10 | 1000000 | CALL | .TRIT052821C7 | 6.25 | 7.00 | 28 May, 2021 | 0.20 | 200,000.00 |
| Tritanium | 10 | 1000000 | PUT | .TRIT052821P5 | 6.25 | 5.00 | 28 May, 2021 | 0.20 | 200,000.00 |
1 Add me to Contacts – I won’t be paying any mail fees. If there is a mail fee, you wont get mail, but your account will be credited as appropriate.
2 Send ISK for the Option and count. Use the description field when you transfer the ISK. Enter the Option name and the quantity. Please be accurate or I’ll send your ISK back. For Example: .TRIT052821C7 x 2
3 I will send an email back confirming the trade and include a transaction ID. (See step 1).
4 On the day after the expiration date:
- If the Option is In The Money (ITM) I will send you an Eve-Contract (to Buy (Put Option) or Sell (Call Option), as appropriate) for the underlying minerals at Jita 4-4 CNA. The Transaction ID will be placed in the Contract’s description field. The Eve contract will be set with an expiration duration of seven days with a cost of 5000 ISK (we split the eve-contract fee). You may then Exercise your Option or not. If you were on vacation or out sick or something and missed your opportunity to Exercise, send me in-game mail asking for a re-issue of the Eve-Contract, please include the Transaction ID, so that I can find it in the records. There are no silly rules, like a Jita ISK doubler, no silly fees or other such non-sense. If it takes you more than 30 days to ask for a re-issue, you may have to wait until the market is in my favor, if the Reserves are insufficient at the time. If you don’t want to wait, we can work out terms to Roll to an Option with a later Expiry. So don’t wait please.
- If I am on vacation, I’ll give ample warning. If I am unavailable due to something unexpected then I will make every effort to notify. If I get hit by a bus or a meteor lands on my house and I die … well too bad.
- If the Option is Out of The Money (OTM) I will not send you an Eve-Contract as the Option has expired worthless.
Risks to You
- The Closing Price is Out of The Money and your Option expires worthless.
- For Example: You buy a one Call Option for one million Trit with a Strike Price at 9 ISK for 0.20 ISK per unit, with an expiry of May 28th, 2021. (This costs you 200,000 ISK, units of underlying x Option Price.) On May 29th, the ATSA, ending on the 28th is 8 ISK. Your option has expired worthless and no Eve-Contract for the underlying will be issued. You will have lost 200,000 ISK.
- I shaft you and steal your ISK.
Risks to Me
- The Closing Price is In The Money and your Option expires not worthless.
- For Example: You buy one Call Option for one million Trit with a Strike Price at 9 ISK for 0.20 ISK per unit, with an expiry of May 28th, 2021. (This costs you 200,000 ISK.) On May 29th, the ATSA, ending on the 28th is 10 ISK. Your option has expired In The Money. I send you an Eve-Contract for one million Trit at the cost of nine million ISK plus one half of the broker fee (5000 ISK). You just bought one million trit for one ISK below the market. You turn around and sell it and make a gross profit of one million ISK minus the cost of the Option, so 795,000 ISK. I’m out whatever it cost me to sell you Trit at 9 ISK a unit.
- I shaft you and steal your ISK and I’m marked as a scammer for all time.
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Thanks for reading,
*as