The option can be worth nothing
Pool owners take the risk of the option position. A put option can lose all of its premium. A Treasury asset can rise, or fail to fall enough for the option to gain value.
Risks and limits
You can lose some or all of your USDC.
COPE Finance does not promise profits or protect capital. Read this page and the whitepaper before considering the product.
Time and volatility work against you
Time reduces an option's value as expiry approaches. Implied volatility can fall after purchase and reduce the option's value even when the futures price falls slightly.
Liquidity can be thin
Option markets can have limited liquidity. A wide bid-ask spread increases entry and exit costs, and the price used for automatic purchase or sale can differ from the expected price.
Futures are not the cash asset
Treasury futures can move differently from cash Treasuries due to delivery, financing, and basis effects. An exercised option can create a futures position requiring margin. The pre-expiry sale rule reduces, but does not remove, execution and settlement risk.
Protocol dependencies
The protocol depends on smart contracts, USDC, the option execution venue, the price source, and settlement services. Each dependency can fail or be attacked. No dependency is claimed to be secure, available, or liquid.
Legal and regulatory limits
Treasury-linked options and pooled investment products can face legal and regulatory limits. Users must check whether they can use the product in their location.
Required before launch
What is still undecided.
COPE Finance is a proposed product. The following must be final before users can create or join a pool. The deployed implementation is the final source of truth.
- Treasury assets and option markets available to pools
- Option venue and settlement method
- Price source, update frequency, and unavailable-price response
- Order rules for buy and sell limits
- Fee rate and fee basis
- NFT transfer rules and restrictions
- Transaction costs, failed trades, and partial fills
- Withdrawal and claim process after pool closure
- Legal jurisdictions and user restrictions
Disclaimer
This website describes a proposed product. It does not offer securities, derivatives, investment advice, legal advice, tax advice, or a recommendation to transact. Options, futures, USDC, smart contracts, and pooled products involve material risk. A user can lose all funds committed to a pool. Users are responsible for reviewing the final terms, implementation, venue documents, and rules that apply in their jurisdiction. COPE Finance is not investment advice, a recommendation, or a substitute for broker or venue documents.
Read the full whitepaper