LPO

Long PUT OPerps a.k.a. LPO tokens represent buying of PUT options and make money in falling markets. LPO holders pay fix premium in a settlement cycle in return for gaining leveraged exposure to fall in the underlying price. In following example, LPO holders make 50% profit for just 1% fall in underlying price. Higher the leverage, more is the profit for same premium paid.

Token holdings are automatically rolled over to the next cycle unless sold

Variable Name	Value
Long PUT OPerps Token Supply	100
Short PUT OPerps Token Supply	10000
Leverage	100
Premium (per cycle)	50%*
Cycle Duration	5 minutes*
Underlying Price Change	-1%

50 (50% of LPO supply i.e. 100) Tokens are transferred from LPO to SPO pool as Premium. 100 (1% of SPO supply 1.e. 10,000) Tokens are transferred from SPO to LPO pool for 1% market fall.

Because of high leverage, LPO holders can make huge profits even with small market moves, despite paying the premium.

Premium and cycle duration values used in this example are meant for our Arbitrum products. On Binance chain, these values are different.