Trade Spear & Shield
How to trade binary options on Divergence
Users can buy and sell Spear and Shield tokens in the Trade section. Spear tokens represent binary calls, and Shield tokens represent binary puts.
On Divergence V1, Spear and Shield can be bought and sold before a 30-minute trading halt period till options expiry. If you wish to get out of an options position before expiry, make sure you sell before 07:30 UTC. Please also take into consideration of the time required to complete this transaction on-chain.
Here is how to trade Spear & Shield:
By default, the Divergence app landing page is the Trade section. It looks like this 👇
To buy/sell options on Divergence (Spear + Shield tokens), you have to complete the above page first. When finished, it will show you the price of Spear. Shield for the particular option you chose.
We will now walk you through how to fill this page out:
Step 1: Select the Type of Option Markets
We currently have 2 option markets available: single strike or range strike.
For the purposes of this tutorial, we will be doing "Single Strike".
Step 2: Select the Underlying.
This means choosing the crypto asset you want to buy/sell options for. Currently, BTC and ETH options are available, priced in USD.
Step 3: Select the Expiry.
On Divergence we have 3 different expiries possible for our options: daily, weekly, and monthly.
Each expiry has its own button. Click on the button of the expiry you want to select it. For the purposes of this tutorial, we will be selecting Weekly.
On each button is written the exact time of expiry, whereas underneath, you will find how much time remains until the end of the selected expiry, an the current price of the underlying.
As you can see here, there is 1D 19H 2 M remaining until trading halts on the selected options pool, and the current price of ETH is $3,880.
Step 4: Select Collateral
Click the drop-down menu to select which crypto asset you wish to use as collateral — in other words, "what do you want to buy your options with?"
At the time of making this tutorial, the only collateral available on this particular options pool is USDC, so I will be selecting USDC.
Step 5: Select your Preferred Strike Price
Choose your strike price from the dropdown menu.
The strike price is the set price at which a derivative contract can be bought or sold when it is exercised. For this tutorial we will be choosing a strike price of 5,500.
Step 6: Get Quote
Click on the get quote button to be taken to the page where it shows the price of Spear and Shield tokens based on the options profile we selected.
You will now end up on this page 👇
It appears almost the same as the last page, except now it quotes you the price of Spear (binary call) and Shield (binary put) token. If you want to change the option details, you can do that as well, and after wards get new price quotes.
Step 7: Click on "Go Trade"
Now you will find yourself in this section 👇 where you can actually buy Spear and Shield.
Step 8: a) Select whether you want to buy Spear or Shield and the quantity you want to buy b) click approve c) go through all the Metamask prompts d) When that transaction is confirmed, the approve button will change to TRADE e) Click on trade and go through the Metamask prompts once again d) When confirmed, you're done All of this should be very familiar if you have experience with AMMs like Uniswap.
I bought 120 USDC worth of Spear. You will likely buy more when you trade on Divergence 🙂
Congratulations, you are now done. You can view your position by clicking on the Dashboard on the top left-hand corner of the page.
Here you will find all the relevant details regarding your Spear/Shield position(s). You can also add to your position, or sell it using the convenient buttons on the right side.
If you hold your Spear and Shield tokens until expiry, and they are "in the money" you can claim your rewards by clicking on the claimable tab.