sUSD collateralised

In the sUSD collateralised vaults, the asset used for collateral for the option selling will be sUSD. The premium collected in the sUSD will be auto compounded. Since sUSD is a stablecoin, the total position's value doesn't change due to the market situation.

Who is this vault for?

sUSD collateralised vaults are generally for users who are looking for pure profit and want to do away with the volatility of the asset that they are selling options for : A scenario for the same is described below, Let's say a user is selling one sUSD collateralised option of ETH at $2000 strike when the price is $2000, for a premium of, say $200 upfront

At expiry, there are three ways the market can go :

Case 1 : ETH spot price moves up

Current Price : 2300 Net Loss : +200 sUSD(Premium Upfront) - 300 sUSD(Option exercised) = -100 sUSD Unlike asset collateralised vaults, even though ETH went up violently, we don't get the benefit of it because we locked the premium upfront in sUSD; we face a loss in dollar terms and are worse off than we started. Total : 2000 sUSD(Collateral) - 100 sUSD = 1900 sUSD

To stack more ETH rather than lock sUSD as profits,

please refer to Asset collateralised Vaults

Case 2 : ETH spot price moves down

Current Price : 1800 Net Profit : +200 sUSD (Premium Upfront) - 0 sUSD (since option is worthless) = +200 sUSD When the vaults make a profit, in sUSD collateralised vaults - it is a guaranteed profit! Total : 2000 sUSD (Collateral) + 200 sUSD(Premium) = 2200 sUSD Regardless of how low the ETH price goes, we are not affected as we have locked our profits in sUSD terms.

Case 3 : ETH price stays neutral

Current Price : 2000 Net Profit : +200 sUSD (Premium Upfront) - 0 sUSD (since option is worthless) = +200 sUSD Again, since the premiums are collected in sUSD, the market situation won't affect our profitability. Total of : 2000 sUSD (Collateral) + 200 sUSD = 2200 sUSD In this case, ultimately, we end up more in terms of sUSD than how we started with.