# Order Book Explained ðŸ“–

Details and explanations for the parameters within our DeSpec Order Book

Last updated

Details and explanations for the parameters within our DeSpec Order Book

Last updated

Expiry Dates

Settlement occurs on the expiration date with the ability to claim/exercise your position on or after that date. 0xdx permits options to be created four weeks out expiring every Friday at 23:59:59 GMT time. Whether you're a Buyer or Seller of an option, be sure to double check when your position expires.

Streaming Price

The Streaming Price displays the current settlement price of an NFT collection based on 0xdx's price oracle. After the option has expired, the Streaming Price is compared to the Strike Price to settle the payout of an option. ðŸ’µ

Call or Put Options

**Call** options involve taking a **long** position and from the buyer perspective means you are banking on the Streaming Price (collection price) to be **greater** than the selected Strike Price by expiry. From a seller perspective, calls are generally sold when they have a neutral to bearish perspective.

**Put** options involve taking a **short** position and from the buyer perspective means you are banking on the Streaming Price (collection price) to be **less** than the selected Strike Price by expiry. From a seller perspective, puts are generally sold when traders have a neutral to bullish perspective.

Strike Price

The Strike Price represents the break-even price for the option contract. The streaming/collection price is compared to the Strike Price upon expiry to see whether the buyer or seller is in or out of the money. For more information on strike price selection:

Order Book

The Order Book consolidates open bids (buy side) and asks (sell side), and displays the last sale. Open orders and the current bid-ask spread can be used to determine the order price for your position and how much liquidity is available for each option type.

Bids

Bids are open buy orders represented in green within the orderbook section.

Asks

Asks are open sell orders represented in red within the orderbook section.

Trades

Under trades, recent matched orders are displayed. These are trades where bids and asks between parties were matched at a given order priceðŸ’°

TradingView Chart

The TradingView chart displays the matched orders/trades as candles with two lines displaying the best (highest) bid in green and best (lowest) ask in red. Volume for matched order is also shown below each candle.

You can use the candlestick chart as a visual aid to help form your position ðŸ“ˆðŸ“‰ Zoom in, change timeframes, draw trendlines and explore the many other TradingView features that we have all come to love! ðŸ’–

Payoff Curve & Expected Profit/Loss

The payoff curve displays the expected profit or loss at a specific settlement price for the respective position you are creating. Also displayed is the max profit and max loss of the position.

Moving your cursor along the payoff curve allows you to see the expected profit or loss at different prices.

The 'Greeks' & Volatility Measures

The 'Greeks' provide a way to measure the sensitivity of an option's price to quantifiable factors. Typical greeks that options traders use to assess their positions are delta, gamma, theta and vega. We have included two other volatility measures: implied volatility (IV) and vomma. Below are the definitions for each measure:

Delta

Delta (Î”) represents the rate of change between the option's price and a $1 change in the underlying asset's price. In other words, if the price of the underlying asset increases by $1, the price of the option will change by Î” amount. (Source: Investopedia)

Theta

Theta (Î˜) represents the rate of change between the option price and time, or time sensitivityâ€”sometimes known as an option's time decay. Theta indicates the amount an option's price would decrease as the time to expiration decreases, all else equal. (Source: Investopedia)

Gamma

Gamma (Î“) represents the rate of change between an option's delta and the underlying asset's price. This is called second-order (second-derivative) price sensitivity. Gamma indicates the amount the delta would change given a $1 move in the underlying security. (Source: Investopedia)

Vega

Vega (Î½) represents the rate of change between an option's value and the underlying asset's implied volatility. This is the option's sensitivity to volatility. Vega indicates the amount an option's price changes given a 1% change in implied volatility. (Source: Investopedia)

Vomma

Vomma is a second-order derivative for an optionâ€™s value and demonstrates the convexity of vega. Put simply vomma measures the rate of change in vega. A positive value for vomma indicates that a percentage point increase in volatility will result in an increased option value, which is demonstrated by vega's convexity. (Source: Investopedia)

Implied Volatility (IV)

Implied volatility represents the expected volatility of the underlying asset over the life of the option. As expectations change, option premiums react appropriately. (Source: Investopedia)