Covered Put Writer

WHAT IT DOES

This tool enables DeFi traders and options strategists to write covered put options directly on-chain. A covered put is a bullish options strategy where the writer deposits collateral (the strike price amount in underlying asset or stablecoins) to back the put option, collects a premium from the buyer, and is obligated to buy the underlying asset at the strike price if the option is exercised. It connects to your wallet and reads the options contract address, underlying asset balance, collateral balance, strike price, option premium, expiration timestamp, option position, exercise status, writer history, and timestamps. The tool signs and submits transactions to write covered put options, deposit collateral, collect premiums, manage option positions, record writer metadata, and emit option events.

HOW TO USE

1. Connect your wallet using the wallet bridge (supports MetaMask, WalletConnect, and other EVM-compatible wallets).

2. Select the target network that matches your options contract deployment.

3. Enter the options contract address and the underlying asset address (use 0x0 for native token), then click "load contract" to initialize the connection.

4. Click "fetch position" to retrieve your current underlying balance, collateral balance, option position, and exercise status.

5. Configure the option parameters: strike price (in underlying asset decimals), option premium (in fee token), expiration timestamp, and number of options to write.

6. Click "fetch current time" to auto-populate a suggested expiration (7 days from now), or manually set a future timestamp.

7. Click "validate option" to check that your collateral is sufficient and the expiration is in the future.

8. Review the displayed position information, collateral balance, and total premium to collect.

9. Click "write covered put" to sign and submit the transaction that writes the options, deposits your collateral, and collects the premium.

10. Click "close position" to close an existing position before expiration if needed.

TECHNICAL MECHANISM

The tool uses ethers.js v5.7.2 to interact with any EVM-compatible options contract that implements a standard interface (getUnderlyingBalance(address) view, getCollateralBalance(address) view, getStrikePrice() view, getOptionPremium() view, getExpiration() view, getOptionPosition(address) view, getExerciseStatus(address) view, writeOption(uint256) external payable, closePosition(uint256) external, getWriterHistory(address) view). The writeOption function requires the writer to deposit collateral equal to (strike_price * option_count) in the underlying asset or stablecoin, which is locked in the contract until expiration or exercise. The premium is paid immediately to the writer as a reward for taking on the obligation. If the option is exercised, the writer is obligated to buy the underlying asset at the strike price using the locked collateral. Transaction handling follows EIP-1559 gas price calculations using receipt.effectiveGasPrice for accurate cost reporting. Writer metadata, including timestamps and amounts, is recorded in the contract's writer history mapping, providing an auditable trail of all option writing activity.

WHAT IT CANNOT SEE

This tool operates purely on-chain and cannot verify off-chain volatility — it does not assess market conditions, implied volatility, or whether the premium adequately compensates for the risk taken. It cannot predict price movements — the tool cannot forecast whether the underlying asset price will fall below the strike price before expiration. It cannot ensure collateral sufficiency during sharp price drops — if the market moves significantly, the locked collateral may be insufficient to cover the obligation at exercise. The tool cannot detect market manipulation, spoofing, or other forms of market abuse that might affect option pricing or exercise decisions. It also cannot guarantee option profitability — like all options strategies, writing covered puts involves risk of loss if the underlying asset price declines substantially.

PLEASE NOTE

This tool works exclusively with EVM-compatible blockchain networks (Ethereum, Polygon, Arbitrum, Optimism, Base, etc.). It requires the options contract to implement the interface described above. All transactions incur gas fees paid by the connected wallet. The tool maintains no persistent storage — all state is refreshed from the blockchain on each session. Writing options involves significant risk — ensure you understand the covered put strategy, the risks of assignment, and the potential for loss before using this tool. Only write options with collateral you can afford to commit, and consider using limit orders and stop-loss strategies to manage risk.