Premia Blue - DeFi Options Exchange

💎 Time to learn the "what" of Premia Blue!

Begin your journey of mastering crypto options trading on Premia.

  • Trade fully customizable European-style options on any ERC-20
  • Earn yield from automated Strategy Vaults
  • Seamlessly enter long- and short positions on any option
  • Fully customize your LP risk profile with range orders
  • Interact with the protocol programmatically via API or the Premia SDK.

Premia Blue: DeFi Options Made Easy

Premia Blue is a fully featured platform for trading crypto options on Arbitrum.

From casual traders to institutional capital, we've got something for everyone. Here's a summary of Premia's core features:

  • Buy options to speculate and potentially profit from price action
  • Sell options to generate extra income on your assets
  • Set range orders to earn trading fees and premiums on specific options
  • Deposit to an automated vault (bullish/bearish) that will execute an options strategy for you
  • Stake Premia (vxPremia) to earn revenue share, vote on emissions, and participate in governance.

To learn what options are and what makes them so great, check out the Options 101 courses here in the Premia Academy!

Crypto Options on Premia

Options give their holder the right to buy or sell an asset like wETH or wBTC at a specific price and date.

Options on Premia are represented as transferable ERC-1155 tokens inside your wallet. They consist of three main components:

  • The cost of purchasing or reward from selling the option (Premium)
  • The price at which an option gives the right to purchase or sell the underlying asset (Strike Price)
  • The date at which an option can be exercised (Expiration Date/Maturity)

Users can switch between the parameters of their choice to receive a set of quotes from range orders, the orderbook, and vaults.

Alternatively, users can switch to the "Option-Chain" view to see all options at once for a given asset and expiration date.

Classic Options Trading View
Option-Chain View

Both views allow users to enter long- or short positions on any option of their choosing. This is also the page where users can close their long options before expiration by selling them, assuming there's sufficient quotes available.

Options on Premia can be traded freely. Users can purchase or underwrite any option of their choosing, or even sell a long option to close it early.

Strategy Vaults

Strategy vaults on Premia are designed to provide liquidity to a specific range of strike prices and expirations with a more predictable risk profile.

Vaults are an easier alternative to range orders. Users can simply deposit liquidity to express their sentiment (bullish/bearish), and the vault will automate a given strategy for them.

Currently, all vaults on Premia are based on shorting volatility by selling options. During times of high upside volatility, the call vaults might incur a loss, whereas the put vaults may lose when the markets are nuking.

All vault strategies will generate yield from multiple sources:

  • Vault strategy PnL
  • Premia Options Liquidity Mining (OLM) rewards
  • Extra rewards and incentives (e.g. ARB).

Covered Call Vaults underwrite call options on the underlying asset on an automated basis. The goal of this strategy is to retain exposure to the underlying asset while generating extra income from premiums. However, if the underlying asset rapidly rises in price, this strategy may incur a loss, since it's based on short call options collateralized by the underlying asset.

Cash-Secured Put Vaults underwrite put options on the underlying asset on an automated basis. The goal of this strategy is to utilize the collateral asset (e.g. USDCe) to generate extra income from premiums. However, if the underlying asset falls in price, this strategy may incur a loss, since it's based on short put options.

Range Orders

Similarly to Uniswap v3, range orders allow users to provide concentrated liquidity inside a pre-defined range of premiums for a specific option.

For example, a user could utilize set a range order to provide liquidity to WBTC-USDCe-12Jan-48000-C, but only when the premium for that option is between 0.02 wBTC and 0.03 wBTC.

To reiterate the options jargon here, WBTC-USDCe-12Jan-48000-C can be dissected to four parts:

  • WBTC-USDCe - The asset pair (Wrapped Bitcoin/Bridged USDC)
  • 12JAN - The expiration date of the option
  • 48000 - The strike price of the option
  • C - The type of option (C for Call, P for Put)

Range orders are a relatively complicated and high-maintenance way to provide liquidity. This is why we've created an open-source Range Order Bot that abstracts away most of the technical stuff! However, it's not a magical money-generating black box.

The Range Order Bot uses parameters specified by the user in order to run. These parameters are entirely user-specific and may require basic knowledge of market making and trading in general. The bot abstracts all the coding so that a user can directly work on refining the parameters without technical expertise.

Users on Premia can buy/sell options on any ERC-20 of their choosing, participate in automated liquidity strategies, or provide liquidity via range orders to maximize fees earned.

Test Yourself!

What are the different ways users can interact with Premia Blue?

  • Users can interact with Premia Blue's smart contracts either via the front-end, directly via Arbiscan, or programmatically via the SDK and API.

  • Users can only interact with Premia Blue via a centralized front-end.

  • Users can only interact with Premia Blue on centralized exchanges.