Even Higher Capital Efficiency with Clearing House

Quick Glossary Before You Read

Payoff: The sum payable by the Settlement Contract to the holder of a Long position at the settlement of a particular options position
Max Payoff: The maximum payout achievable for a specific options position upon its settlement after expiration

Moby's Clearing House operates akin to TradFi institutions, facilitating netting processes that improve OLPs Asset Utility Ratio
With Clearing House, Moby’s OLPs can theoretically achieve unlimited growth in capital efficiency

Because Options Position Tokens issued on Moby are fully collateralized, OLPs entering short positions are required to maintain collateral up to Max Payoff until they are settled
It is thus crucial for OLPs to effectively manage collateral requirements to enhance capital efficiency and thereby generate additional sources of income

In cases where an OLP has both Long and Short positions in the same options against different traders, these can be netted to reduce the Max Payoff to zero effectively
The netting process is initiated by the Clearing House, prompting the OLP to identify Long and Short Options Position Tokens with matching expiration dates and strike prices in their portfolio
Identified matching pairs are burned and OLPs are allowed to reclaim the assets held as collateral, minus any fees owed to the Clearing House

Last updated 3 months ago