The Perpetual Option is a funding-based derivative that can express an arbitrary number of payoff functions, including the one used by the Perpetual Future. This document provides a high-level overview of the Perpetual Option.
Dubbed as “the perpetual future of options”, the floating strike perpetual option is a novel type of option that doesn’t expire, and that remains relevant in perpetuity. It was originally introduced in May 2021, by Paradigm researcher Dave White, in a paper titled Everlasting Options. “Perpetual options give traders
The greeks of a perpetual option are determined by two factors: Its money-ness (ITM, OTM, ATM) and its funding period.
A perpetual option can be thought of as a basket of European-style options, each of which has the same strike price but different expiration dates.
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