Contract terms
Once you buy, your contract's terms are recorded and cannot be changed by you, the pool creator, the underwriters or BlockFinaX's pricing service.
| Term | Meaning |
|---|---|
| Pair and direction | What the contract protects against. |
| Notional | The amount protected. |
| Rate at purchase | Today's rate when the quote was made. Payouts are measured against it. |
| Strike | Where the payout starts. |
| Limit | Where the payout stops growing. |
| Structure | Limited or Open. |
| Tenor and expiry | The length and the moment the contract ends. |
| Premium and fee | What you paid. |
| Maximum payout | The most the contract can pay, reserved in full. |
| Pool | The pool whose underwriters back the contract. |
What you receive
| Rate at expiry (Up cover) | You receive |
|---|---|
| At or below the strike | Nothing. The contract ends. |
| Above the strike and below the limit | notional × (rate − strike) / rate at purchase, less the 2% payout fee |
| At or above the limit | The maximum payout, less the 2% payout fee |
A Down cover mirrors this for rates below the strike.
Example
Notional 10,000, rate at purchase 1,330, strike 1,360, limit 1,500. If the rate at expiry is 1,420, the payout is 10,000 × 60 / 1,330 = 451.13 USDC. After the 2% fee you receive 442.11 USDC.
What the contract does not do
- It cannot be cancelled, transferred or sold back.
- It pays in USDC, not in your local currency.
- It does not pay for moves during the contract, only for the rate at expiry.