The Mayor

August 27, 2025

Know your options

Chia's Options Contracts

Options trading arrived a few days ago on the Chia Blockchain.  All though trading them is a bit difficult to do as of today (August 26, 2025).  Over time that will become easier.  https://dexie.space is working on integrating them into their platform and I'm working on my own platform specifically for trading and tracking options.

What is an option on Chia?

At its base, a Chia option is just an offer file that can be bought and sold.  Unlike other offer files, only the current owner of the singleton can execute the offer.   But the option has a time limit.  If the offer isn't taken within the time period then the funds locked up in that offer return to the option creator.  You can read more in my last post Chia Options.

Option Strategies

I'd argue that the terminology of Calls and Puts don't holdup as well on chain as it does in the stock market.  After all, when trading stocks you only really have 2 choices.  Buy a stock for fiat or sell a stock for fiat.  But using Chia Options you have so much more flexibility.  

This flexibility seems counter intuitive at first, because you really only have 5 settings in your option contract.

  • Underlying Asset
    • What you lock up
  • Underlying Price
    • How much you lock up
  • Strike Asset
    • What you want
  • Strike Price
    • How much you want
  • Expiration 
    • How long before your offer expires and you get your funds back.

The real benefit is that you get to enter all this information your self.   In today's stock market, an options contract is for 100 shares of stock, full stop.  What if you have 50 shares and want to try to make an option on them. Well, you can't directly. 

Chia gives you access to strategies that just can't be done on traditional rails.  

The Cascading ITM Covered Call

Take a look at this examples:


We will start out traditionally with a 100 XCH Call option.   For easy math, lets say XCH is $10 per.

You could create a covered call like this:

  • Underlying:   100 XCH
  • Strike:            500 wUSDC.b (stable coin)
  • Expiration:     2 weeks
  • Option price:  $510

Then you make an offer on the market to sell this contract for 510 wUSDC.b

510 (option sale) + 500 (strike price) = 1010
You make a $10 profit in 2 weeks ~ 26%

If this was the traditional financial system, your trade is done here.  Not on Chia though.

You have another 510 that can buy Chia at $10...  You can make another option:

  • Underlying:    51 XCH
  • Strike:            255 wUSDC.b
  • Expiration:     2 weeks
  • Option Price: $260

  • Underlying:    26 XCH
  • Strike:            130 wUSDC.b
  • Expiration:     2 weeks
  • Option Price: $133

  • Underlying:    13 XCH
  • Strike:            65 wUSDC.b
  • Expiration:     2 weeks
  • Option Price: $67

For sanity I'll stop here, but in theory you could try to keep going.

With 100 XCH, you could sell options on 190 XCH. 

In this example, your potential earnings on 1000 worth of XCH is $20 in two weeks, or just over 50% APR

This example comes with risks.  You will lockup your asset in a contract before you get to sell it.  If you mess up while making the contract, then your funds are locked until expiration unless you execute the option your self.   You just need to have the strike asset in enough quantity to cover it. The other risk is the option not selling.  If the price moves some you can always re-adjust your offer to sell the option.  You cannot adjust the option after it's created.   You also run the risk in this example of the price of XCH falling below $5/xch.  Being 50% in the money should help cover that risk though.


The Mayor
X: @MayorAbandoned