Earn (making)

The EARN card#

An EARN account posts a curve of option prices that traders trade against; the maker earns the spread. The card has a deposit, two caps, a mode (TLP, AUTO or CUSTOM) and a START / STOP QUOTING switch. An account with no deposit cannot quote: zero equity is zero cap is zero capacity.

The two caps are the maker's own view of risk, in coin. The rally cap limits what the maker will stand to lose if the price rallies (its written calls); the crash cap limits what it will stand to lose on a crash (its written puts). They need not match — a maker that fears a crash more than a rally sets them apart, and that asymmetry is the maker's own. A cap is a promise about size, counted in perps: one perp is one coin of the asset.

TLP#

TLP is the first choice: one deposit and one switch to make a market on every listed asset at once. The deposit is split equally, in dollars, across the assets, and on each one you stand as an AUTO maker with caps set from that asset's share. A curve quotes only one asset, so underneath there is one EARN account per asset, managed as one: DEPOSIT and WITHDRAW move across them, START and STOP QUOTING act on all, and the rows under the card show each asset. Nothing is shared between accounts: each holds only its own share of your money. If you want an unequal split, use AUTO on each asset instead.

AUTO or CUSTOM#

AUTO quotes the oracle's bid and ask surfaces plus the maker's own bias with its inventory, the lean (see Pricing). You type only a deposit and the two caps. CUSTOM posts your own curve, from your own model, by hand or over the API; the card prints the exact recipe an agent needs.

An AUTO maker with nothing held quotes the oracle itself. Each fill lifts its quotes at that strike and decay by the share of its cap it has used there, times a half-spread. It never lowers a quote, and a flat book has no lean. What the maker has sold becomes more expensive to buy from it, so flow slows as the cap fills.

Caps are promises, not fill gates#

One number refuses and one number leans. Leverage refuses: the venue's only hard refusal is margin, the closed-form test in section 3, tested at every fill. κ leans: a book at or past its cap is never turned away; its curve has already moved against the flow, and if it moves outside the corridor it stops setting the front but stays posted. The caps pace the lean and nothing else. The card's "used X % of your rally cap" is a read-out, not a gate.

On a typical worldview the lean is near-uniform within a wing: short one at-the-money call lifts every call by about the same amount and every put by a little in the other direction. In practice that is two numbers, one for calls and one for puts.

Makers are margined like everyone else#

A maker holds no perp; its book is options only. Its sold rows are margined by the same closed form as a trader's (section 3) at the maker's own mark, and its equity is the cash deposited into the account through the MARGIN field plus the account's own profit and loss. The wallet's undeposited cash backs nothing, and caps your deposit cannot back are refused when you set them. Deposit more and the room grows; withdraw and it shrinks, down to what the account must keep behind what it has written.

Lines and closing#

An EARN account does not open positions of its own choosing. It accrues one line per trade against traders, and the card gives CLOSE on each line and CLOSE ACCOUNT for all of them. A maker's own close passes its obligation to the makers standing at the front, and the trader keeps its side. The account survives a close — its curve, caps and quoting state stay — so a maker that flattens can quote again at once.

Fees and names#

A maker pays no fee for now; the venue's taker fee is described in Pricing. What a maker sees is its own curve and the aggregate book — no other maker's name, no per-maker flow, no record of who traded when.

What prices an AUTO or CUSTOM maker#

Behind a price is a worldview Θ: a Kou double-exponential jump-diffusion with six numbers — a lean per year, a smooth volatility, and how often and how big crashes and rallies are. AUTO takes its curve from the fitted oracle; CUSTOM posts its own. A curve with no fit yet falls back to ASSET_THETA, a worldview frozen from the asset's own price history, so it never prices off nothing.