> ## Documentation Index
> Fetch the complete documentation index at: https://docs.thetalabs.gg/llms.txt
> Use this file to discover all available pages before exploring further.
# Options Trading
> Trade Yes Calls and No Calls on prediction market probabilities — leveraged exposure with your risk capped at the premium.
Options on Theta Labs are cash-settled **call options on a prediction market's probability**. Instead of buying shares directly, you buy the right to profit if a market's price finishes above a specific threshold — the **strike** — at expiry.
This lets you express a view with a fraction of the capital, while capping your downside to the premium you paid.
Options on Theta Labs are **real-money trading**, funded by your pUSD balance. The premium you pay is the most you can lose on a contract you buy — but losses are real.
## Yes Calls and No Calls
Every options market offers two sides:
* A **Yes Call** pays off when the market's **Yes price** finishes **above your strike** at expiry. Buy Yes Calls when you think the probability is going up.
* A **No Call** is a call on the market's **No price** — it pays off when the No price finishes above your strike, i.e. when the event becomes *less* likely. Buy No Calls when you think the probability is going down.
There are no puts: a No Call plays the same role, since the No price rises as the Yes price falls.
## Key terms
| Term | What it means |
| -------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Strike** | The probability threshold your contract is struck at, shown as a percentage. A 40% strike Yes Call pays off if the Yes price settles above 40%. |
| **Premium (Ask)** | The price you pay per contract, quoted in cents. This is your maximum loss. |
| **Breakeven** | The settlement price at which your trade breaks even: strike + premium. Shown for every strike in the chain. |
| **Max return** | The multiple you'd make if the market settles at the maximum (100% for a Yes Call), e.g. "4.2x". |
| **Expiry** | When the contract stops trading and settles. |
| **Settlement price** | The average of the market's Yes/No price over the **final 60 minutes** before expiry (time-weighted) — or exactly 0 or 1 if the market resolves before expiry. |
## The capital efficiency case
> A market is trading at 40% and you think the probability is going higher. Two ways to play it (illustrative numbers):
| Approach | Capital required | If it settles at 60% | If it settles at 80% | If it drops to 30% |
| ------------------------------------------- | ---------------- | -------------------- | -------------------- | ------------------ |
| Buy 1,000 YES shares at 40¢ | **\$400** | +\$200 (50%) | +\$400 (100%) | −\$100 (−25%) |
| Buy 1,000 Yes Calls, 40% strike, 5¢ premium | **\$50** | +\$150 (300%) | +\$350 (700%) | −\$50 (capped) |
The calls cost a fraction of the capital and deliver multiples of the return — with your downside capped at the premium regardless of how far the price falls.
## How payoff works
At expiry, each contract pays:
```
Payoff = max(settlement price − strike, 0)
```
* A Yes Call with a 40% strike, on a market that settles at 65%, pays \$0.25 per contract.
* If the settlement price is at or below your strike, the contract expires worthless and you lose only the premium.
Every options market page includes a **"How & When This Settles"** explainer with the exact rules for that market.
## Reading the options chain
Pick **Yes Calls** or **No Calls** and an expiry, and the chain lists the available strikes:
| Column | What it shows |
| -------------- | -------------------------------------------------------------------- |
| **Strike** | The probability threshold, as a percentage |
| **Breakeven** | The settlement price where the trade breaks even |
| **Max return** | Your return multiple if the market settles at the maximum |
| **Ask** | The price to buy, in cents — tap it to add the strike to your ticket |
A **Spot** marker highlights the row nearest the market's live probability. Strikes close to the current price cost more because they're more likely to pay off; strikes further away are cheaper but need a bigger move.
Every contract is fully backed by collateral locked by the platform's dealer desk, so each strike has **limited supply**. The chain shows how many contracts are available, and a strike can show **Sold out** once its capacity is taken.
## Placing a trade
Open the **Options** page (the app's default view). Each card shows the market, its live probability, and **Yes Calls** / **No Calls** buttons.
Select **Yes Call** or **No Call**, then pick an expiry from the dropdown (shown as "Expiring {date} ({n}d)").
Tap the **Ask** price on any strike to add it to the ticket. The ticket supports multiple legs, and you can size in **Contracts or Dollars**.
The ticket shows a payoff-at-expiry chart — drag the cursor to any settlement level to see your P\&L there — along with **Max profit**, **Max loss**, and **Breakeven**.
Click **Buy for \$X**. Your order fills instantly against the platform dealer at the quoted ask. The minimum order is 1¢ total.
## Pricing, spreads, and fees
Options are priced by a probability-space model built for prediction markets, accounting for time to expiry, volatility, and the distance between the current price and the strike.
Theta Labs charges no explicit fee on options trades. Quotes include a **market-making spread** (roughly 2% in normal conditions, wider as a strike's remaining capacity fills up) — the price you see in the ticket is the price you pay.
## Expiries
Contracts are listed on several cadences, chosen per market:
* **Daily**
* **Mon / Wed / Fri**
* **Weekly** (Fridays)
* **Monthly** (third Friday)
The standard expiry time is **8:00 pm ET**. Some markets also carry an earlier **final expiry** on their resolution day (for example, before a game starts).
## Settlement
Settlement is automatic — no action needed:
* The **settlement price** is the time-weighted average of the market's Yes/No price over the **final 60 minutes** before expiry. If the underlying market resolves before your expiry, the contract settles at exactly 0 or 1.
* In-the-money contracts pay `settlement − strike` per contract, credited to your pUSD balance. Out-of-the-money contracts expire worthless.
* Settlement runs automatically on an hourly cycle after expiry.
## Managing positions
Your open options positions live on the **Portfolio** page. Each row shows the market, your side and strike (e.g. "Yes call · 20% strike"), **Qty**, **Avg** (your entry price), **Now** (the current mark), **Exp** (days to expiry), and unrealized P\&L in dollars and percent.
Each position has three actions:
* **Buy** — jump back to the market to add to the position
* **Sell** — close early via a sell ticket showing the live bid, your entry, what you'll receive, and your realized P\&L; click **Sell for \$X** to fill at the dealer's bid
* **Share** — generate a shareable card of the position
You can only **buy** options on Theta Labs (and sell to close what you own). Writing contracts — selling to open — isn't available; all contracts are written and fully collateralized by the platform's dealer desk.