Aevo
Aevo options express price views through calls and puts with a chosen strike and expiry
Aevo options let buyers choose calls for exposure above a strike or puts for exposure below it at expiry. The strike sets the price boundary for the contract’s payoff. Choosing between them also means choosing a premium, expiry and position size. A favorable price move only produces a profitable purchase when the resulting value exceeds the premium and relevant fees. Buying either contract creates a long option; selling one to open creates a short obligation.
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In short: A call or put can finish in the money and still leave its buyer with a loss after the premium and fees.
Call payoffs and put payoffs
Calls above the strike
A long call has positive intrinsic value at expiry when the underlying settlement price exceeds its strike. Intrinsic value is the favorable difference between those prices, scaled to the contract’s underlying exposure. A call has no intrinsic value at expiry if the underlying settlement price is at or below the strike. Its buyer can therefore lose the entire premium despite an earlier rise in the underlying price.
Puts below the strike
A long put has positive intrinsic value at expiry when the underlying settlement price falls below its strike. Its payoff grows as that difference widens. Before fees, a purchased put breaks even at strike minus premium per underlying unit. A purchased call breaks even at strike plus premium per underlying unit.
The premium boundary between buying and writing
A standalone purchased call or put limits the contract’s loss to the premium paid plus applicable transaction costs. That boundary describes the individual option, not the safety of every position sharing an account. Paying a small premium can still produce a complete loss of the amount committed to that purchase.
Writing an option means selling to open a short position. The writer receives the premium and takes on the corresponding settlement obligation. Losses can exceed the premium received. A short call faces rising obligations as the underlying rises above its strike; a short put faces rising obligations as the underlying falls below the strike.
The contract type and the position direction answer different questions: call or put defines the payoff, while long or short defines ownership or obligation.
Strike, expiry and the premium
Strike distance
Moneyness describes the relationship between the underlying reference price and strike. An out-of-the-money call has a strike above that price. An out-of-the-money put has a strike below it. Either can carry a trading premium before expiry even without intrinsic value.
A more distant out-of-the-money strike requires a larger favorable move to acquire intrinsic value. Comparing premiums across strikes also requires the same expiry and equivalent underlying exposure.
Expiry and the event window
An option’s expiry determines the end of its exposure to future price movement. Aevo’s ETH options expire at 08:00 UTC on their expiration date. Their specifications include daily, weekly, monthly and quarterly expirations. An expiry preceding an anticipated event cannot capture movement occurring afterward. The selected contract’s actual date governs its exposure window; a weekly or monthly label alone does not identify that date.
Time value and volatility
Time value is the portion of a premium exceeding current intrinsic value. Implied volatility describes the scale of price fluctuations the option price implies. With other inputs unchanged, higher implied volatility generally raises both call and put premiums. Time decay generally erodes time value as expiry approaches. Falling implied volatility and time decay can offset a favorable underlying move, leaving the purchased option worth less than its entry premium.
An expiry break-even describes an option held through expiration. Before then, an executable resale price can include remaining time value. A profitable early sale therefore does not require the underlying to cross the expiry break-even. Conversely, crossing that level before expiry does not establish the final trading outcome.
Execution prices and option fees
Aevo uses off-chain order matching and on-chain settlement. Entry cost combines the filled premium with the trading fee. The bid is the highest quoted buying price; the ask is the lowest quoted selling price. Their difference is the bid-ask spread. Available quantity at each price affects the execution cost of a larger order. An option’s displayed mark or last price does not establish an executable price for the entire quantity.
Maker and taker classifications describe adding or removing order-book liquidity, independently of buying or selling. Aevo’s options trading-fee calculation applies a premium-based cap to the notional-based charge. Notional measures underlying exposure, while the premium prices the option itself. Perpetual futures have separate contract specifications and fees.
Holding an in-the-money option through expiry can also incur a settlement fee, subject to a cap tied to its intrinsic value at expiry. Daily Options are exempt from that settlement charge. Expiry profit subtracts the entry premium, trading costs and any applicable settlement fee from the cash payoff.
A hypothetical call entry within a spending ceiling
Consider a hypothetical ETH call purchase with these assumed total position amounts: premium P: 84 USDC, entry trading fee F: 1.34 USDC and entry spending ceiling: 86 USDC. The fee is an illustrative amount, not a quoted rate. The premium represents the entire selected quantity.
The buyer chooses a call for upward exposure and confirms its strike, expiry, quantity and buy direction before placing the order. The expected entry debit fits the spending ceiling. Entry cost uses
D = P + F
, where D is the total debit in USDC.
Assume the order fills completely and its execution record shows the same premium and fee. The recorded calculation is
84 + 1.34
, giving an entry debit of 85.34 USDC. The observed debit matches the expected amount and remains below 86 USDC.
A final comparison with the position record confirms the intended long call and filled size. An order submission alone would not establish that completed purchase.
A different filled premium or fee changes the debit. This calculation establishes entry cost; eventual profit or loss also depends on sale proceeds or the expiry payoff and any later fees.
Margin across option positions
Standard Margin evaluates positions individually without recognizing offsets between them. Aevo’s Portfolio Margin evaluates risk across an account’s combined positions. Its model combines price and volatility stress scenarios with a floor for net short exposure. Lower collateral requirements do not change the contracts’ payoffs or eliminate liquidation risk. Options share an account framework with perpetual futures, so the collateral available to support a short option also depends on the account’s other obligations.
A call spread beside a single call
A bull call spread pairs a purchased call with a sold higher-strike call on the same underlying and expiry, with equal underlying exposure. The sold premium reduces the net entry premium and caps the combined expiry upside beyond the higher strike. Both legs contribute trading costs, and their combined margin treatment depends on the account’s margin model. A single long call retains uncapped upside; the spread exchanges some of that potential for a lower net premium.
Still wondering about Aevo options?
Does buying an Aevo ETH call also buy AEVO tokens?
An ETH call creates option exposure to the Aevo ETH Index. Its specified underlying determines the payoff, while AEVO is a separate token. Buying the call does not purchase AEVO tokens or give ownership of the ETH represented by the contract. The option’s premium pays for its contractual exposure.
Can I close a purchased Aevo option before expiry?
Selling up to the quantity held can reduce or close a purchased option while its market remains open, provided the order finds liquidity. The sale must concern the same option series, including its underlying, strike, expiry and call or put type. Selling beyond the existing holding can create a new short obligation. The available bid and trading fees determine the proceeds.
Do in-the-money Aevo ETH options deliver ETH?
Aevo’s ETH options settle in USDC cash. A long holder’s positive expiry payoff therefore settles in cash instead of delivery of ETH. The Aevo ETH Index is the specified underlying reference. Holding the option gives exposure to the contract’s payoff, while owning or transferring ETH is a separate operation.
What does the ETH option price tick represent?
The ETH option specifications list a price tick of $0.01. A tick defines the quote’s price increment, independently of the quantity traded. It does not specify the position’s underlying exposure, margin requirement or trading fee.
Is an option’s delta the probability I will make a profit?
Delta estimates how sensitive an option’s price is to a change in its underlying price, with other inputs held constant. It does not calculate the probability of profit after premiums and fees. Traders sometimes use the absolute value of delta as a rough estimate of the probability of expiring in the money, which answers a different question. Delta also changes as market inputs change.
Could an Aevo put offset losses on an existing holding?
A purchased put can offset some losses on a holding of the same underlying during the option’s exposure window. The protection depends on its strike, quantity, expiry and settlement reference. A put expiring before a later decline provides no expiry payoff for that subsequent movement. Premiums and fees remain costs even when no protection payout occurs.
Did the legacy Ribbon vault shutdown end Aevo exchange options?
Aevo’s December 14, 2025 update concerned the shutdown of legacy Ribbon DeFi Options Vaults on Ethereum. The team said its Layer 2 exchange was unaffected by that exploit. The stopped vault contracts and the exchange’s call and put markets were separate products. The vault shutdown therefore did not establish an end to exchange option trading.