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📈Long Options

For traders, opening long positions is straightforward: Select a type of collateral, and swap for Spear tokens as calls, or Shield tokens as puts.
If you are new to the Divergence Protocol, it is recommended to start with the protocol basics first.
Longing digital options is similar to market buying options in a traditional order book. Instead of matching with specific orders one after another, the swaps execute against a passive pool of liquidity. Liquidity providers earn fees proportional to their committed capital. The protocol's swap functionalities are long-only. Collateral tokens are swapped for options tokens, not the reverse.
Before expiry, traders can close their longs by providing the options token they've bought as liquidity to a price range, similar to limit sell orders in a traditional order book. Alternatively, to hedge or offset a number of long calls (puts), one can buy the same amount of puts (calls), or provide collateral liquidity to open shorts.
After expiry, if the options tokens are in-the-money, they can be exercised for 1 collateral token each. The following pages provide step-by-step guides about using the protocol interface to complete the above steps: