TAPE2
Risks for writers
Writing a call means selling the upside of your coins for a week in exchange for a premium today. The premium is yours no matter what. Everything else on this page is what you give up or what can go wrong. Read it before you lock anything.
You cap your upside for 7 days
If the coin runs past the strike, the holder will exercise. You receive the strike in WETH and lose the coins. Whatever the coin does above the strike is the holder's, not yours.
Worked example with the numbers measured on 2026-10-15. CASHCAT's highest vol window was 152% (24 hours), so the contract's sigma was 172% and a 7-day at-the-money call was priced at about 9.5% of spot. The table uses 9.5%.
| CASHCAT a week later | Holder exercises? | You end up with |
|---|---|---|
| Down 30% | No | Your coins, worth 70% of what they were, plus the 9.5% premium |
| Flat | No | Your coins plus the 9.5% premium |
| Up 9.5% | Yes | The strike in WETH plus the premium, about the same as holding |
| Up 50% | Yes | The strike in WETH plus the premium, 40% less than holding |
| Up 300% | Yes | The strike in WETH plus the premium, 290% less than holding |
Memecoins do the last row. If you would be sick to miss a 3x, do not write the call.
The premium does not protect you on the way down
A 9.5% premium is a cushion of 9.5%, nothing more. If the coin falls 60% in the week, you hold coins worth 40% of what they were. Writing a call is not a hedge.
You cannot get the coins back early
Once a ticket is bought, the coins stay locked until the holder exercises or the expiry passes. You cannot cancel a sold ticket, and you cannot sell the coins while they are locked. An unsold ticket can be cancelled by the writer at any time.
The price comes from the past week
The chain prices the call from realized volatility over the last 24 hours, 7 days, 21 days and 6 hours, taking the highest. A week can be quiet and the next week can be wild; news does not announce itself on the tape. The contract adds 20 points of vol above the measured number and refuses purchases while the 6-hour vol is above 3 times the long vol, but a jump that starts after your ticket sells is yours to bear. The maximum expiry of 7 days keeps the window short on purpose.
Thin pools move more than the tape says
A pool with little liquidity can be moved by one trade. Realized volatility measured over 10-minute to 2-hour steps smooths some of that, and the pricing price is the higher of a 30-minute average and spot, not the last trade alone. Even so, the thinner the pool, the wider the gap between the number on the tape and the price you could actually sell at.
What is paid in what
- 99% of the premium is paid to you in WETH when the ticket is bought; 1% is the fee.
- If exercised, the strike is paid to you in WETH, strike times amount.
- If not exercised, your coins come back after expiry when anyone calls expire.
What cannot happen
- The contract cannot sell your coins at a price. It only hands them to a holder who paid the strike, or back to you.
- Nobody can change the strike or the expiry of a sold ticket.
- The contract cannot read a price feed, because there is none to read, and the price at expiry does not enter settlement.
- No admin can pause an existing ticket or take the locked coins. The volatility pause only stops new tickets.
When writing makes sense
You already hold the coin, you would be content to sell it at the strike next week, and you want the premium either way. On the numbers above, that is about 9.5% in a week for agreeing to sell CASHCAT at today's price, and you may ask up to double that. If any of those three is false, the premium is not worth it.