Making Your First Trade

"The market can stay irrational longer than you can stay solvent." — John Maynard Keynes

The screenshots in this walkthrough are based on the Optimism (Sepolia) Testnet network. To follow along, head over to our Testnet Faucet and grab yourself some Mock Tokens. To get the native asset (ETH) on Optimism (Sepolia) Testnet, visit one of the publicly available OP Sepolia Faucets and follow their respective instructions.

In this guide, we will cover the following topics:

1. Connecting to OptSwap

2. Understanding the Option Chain screen

3. Buying a Bitcoin Call option

4. Selling an Ethereum Call option

I. Connecting to OptSwap

1. Install MetaMask & fund your Wallet

Download & install the Metamask extension for your browser from the official source: https://metamask.io

You will need to fund your wallet with some native asset (ETH) for paying gas fees to the network, as well as the appropriate underlying assets and/or cash tokens for the markets you want to trade in. To get ETH on the Optimism (Sepolia) Testnet, visit one of the publicly available OP Sepolia Faucets and follow their respective instructions

If you want to first get some practice by paper-trading on the testnet networks, head over to the Testnet Faucet to grab some Mock Tokens.

2. Connect your Wallet to the dApp

Click the "Connect Wallet" button and choose your MetaMask Account that you want to connect with OptSwap. Click the "Next" button and "Connect" button on the subsequent confirmation screen.

Connect Wallet to OptSwap

Select MetaMask Wallet Account

You should now be connected to OptSwap. Your public address and balances will be displayed on the top-right of the screen.

✅ Done! You are now connected and can begin trading on OptSwap.

II. Understanding the option chain

1. The Strike Prices

All the strike prices are listed in the center column in ascending order. The option chain is usually centered around the current market price of the underlying asset.

2. Calls & Puts

All the call options details are on the left-hand side of the strike prices column and the put options details are on the right-hand side.

The call options with a strike price below the underlying assets current market price, and put options above the market price, are In-The-Money and have a shaded background. Out-of-The-Money options will not have a shaded background.

3. Default Columns

The option chain displays the following default columns for the calls & puts respectively:

• LTP (% CHG) – Last Traded Price & percentage change: The price at which the option contract was last traded and the percentage price change from 24-hours ago.

• BID (QTY) – Bid Price & Quantity: The best price and number of lots (contracts) that the buyers are bidding at.

• ASK (QTY) – Ask Price & Quantity: The best price and number of lots (contracts) that the sellers are asking for.

• BID IV & ASK IV: The computed Bid and Ask Implied Volatility (IV) values respectively.

• OI (% CHG) – Open Interest (OI) & percentage change: The current open interest for the option contract and the percentage change from 24-hours ago.

4. Action Buttons

Towards the extreme left & right of the option chain, you will see a few buttons to perform various actions on the calls and puts respectively:

• ⨁ – Add New Columns (header): Clicking this in the table header will reveal additional columns that may be added containing advanced metrics and options greeks.

• "B" – Buy Limit Order: Clicking this will open the Limit Order form to buy a call or put option directly on the DEX.

• "S" – Sell Limit Order: Clicking this will open the Limit Order form to sell a call or put option directly on the DEX.

Hovering over these will reveal more options:

• "B 🤖" – Buy Managed Order: Clicking this will open the Managed Order form for the AMM to buy a call or put option on your behalf.

• "S 🤖" – Sell Managed Order: Clicking this will open the Managed Order form for the AMM to sell a call or put option on your behalf.

• Add to Watchlist: Clicking this will add this particular option contract to your watchlist.

• Market Depth & Chart: Clicking this will open the market depth (order book depth) and that specific options chart.

Additional Action Buttons (On Hover)

5. Network & Graph Health Indicator

The footer contains the network and graph health indicator. Ideally, this should be green indicating that the subgraph and your RPC connection are healthy and receiving up-to-date information from the blockchain. If not, you may see a warning that the data is not in-sync.

✅ Great! You should now be able to see and understand what the market is currently doing. Let's do some trading.

III. Buying a Bitcoin Call option

So, you're bullish on Bitcoin and want to buy a call option...

1. Choose the WBTC-USDC market.

Choose Token Pair

2. Set the option style, lot size and expiry.

Option Contract Specifications

3. Select your strike price.

In this example, we will choose the 61000 Strike.

Option Type and Strike Selection

4. Click the "B" (Buy) button and enter the number of lots to buy & premium you're willing to pay. Approve the cash tokens for the total premium.

Buy BTC 61000 Call Option

5. Click the "Buy" Button and confirm the order in your wallet.

Confirm Order in wallet

6. Wait for the confirmation from the blockchain.

Order Confirmed on Blockchain

✅ Congratulations! You just bought a Bitcoin call option. The process of buying put options, which offer downside protection, is very similar! Next, we will sell an Ethereum call option.

IV. Selling an Ethereum Call option

So, you have some Ethereum and want to earn income selling covered calls -- perhaps to cover some of the cost of that Bitcoin call option you just bought. The steps are quite similar except that you need to post ETH as margin for the short call option.

1. Choose the ETH-USDC market.

2. Set the option style, lot size and expiry.

3. Select your strike price.

In this example, we will choose the 2700 Strike.

Option Type and Strike Selection

4. Click the "S" (Sell) button, enter the number of lots to sell & premium you expect to receive.

Sell ETH 2700 Call Option

5. Since the native asset (ETH) is the underlying asset, no additional ERC-20 token approvals are needed. Confirm the order in your wallet.

6. Wait for the confirmation from the blockchain.

✅ Nice! You just sold an Ethereum call option. The process of selling a put option is very similar, except that your margin will be denominated in cash tokens (USDC) instead!

Further reading

Managing Your OrdersManaging Your PositionsAdvanced Order TypesAutomated Market Maker (AMM)