> For the complete documentation index, see [llms.txt](https://docs.predy.finance/predy-v5/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.predy.finance/predy-v5/core-of-v3.0/product-recipe.md).

# Product Recipe

Perpetual Option

{% hint style="info" %}
Points:

* Options with strike prices based on Uniswap ticks.
* Strangle and Spread can be composed.
* Option is curved and has a slow Gamma.
  {% endhint %}

### **Call/Put Option**

Describe the basic positions that can be expressed using Uni LPT. $$Example: x = ETH, y = USDC, \sqrt{s} =  \sqrt{P\_{twap}}$$

<figure><img src="https://2706939693-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FfbExO6yzRHDLBgKv08Jf%2Fuploads%2FBpi1Se4HA8EjqdzKEj1Q%2FFrame%205.png?alt=media&amp;token=8c83cc4f-cfe9-4863-9ebb-902fd5a584b7" alt=""><figcaption></figcaption></figure>

①: exchange USDC for ETH and mint LPT.

②: mint LPT with USDC.

③: borrow ETH and mint LPT.

④: borrow ETH and mint LPT.

⑤: borrow ETH, exchange it for USDC, and mint LPT.

⑥: borrow LPT, exchange ETH in LPT for USDC, and use the USDC as Margin for LPT.

⑦: borrow LPT and use the USDC in LPT as Margin.

⑧: borrow LPT and use the ETH in LPT as Margin.

### **Strangle/Spread Position**

<figure><img src="https://2706939693-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FfbExO6yzRHDLBgKv08Jf%2Fuploads%2FvYW4rOrZDoQ8VcVrvyBP%2FFrame%207%20(2).png?alt=media&amp;token=fd4f75e1-3a17-4792-81e1-76db30da3f02" alt=""><figcaption></figcaption></figure>

⑥ + ⑦: Simply combine ⑥ and ⑦. By having a range (described below), it will be close to the Predy v2 gamma long (Delta Neutral).

① + ⑧: By using ① as Margin for ⑧, the required margin can be minimized.

* Borrow $$LPT\_{k1}$$ at ⑧ and burn.
* Exchange USDC in $$LPT\_{k1}$$ for ETH.
* Mint $$LPT\_{k2}$$ using ETH in ①.
* $$LPT\_{k2}$$ as Margin for ⑧.

④ + ⑤:

* Borrow $$LPT\_{k2}$$ at ⑤ and burn.
* Exchange ETH in $$LPT\_{k2}$$for USDC.
* Mint $$LPT\_{k1}$$using USDC in ④.
* $$LPT\_{k1}$$ is used as Margin for ⑤.

### Option Curve&#x20;

By having a range, a gradual change in gamma can be achieved in ① \~ ⑧ above. &#x20;

<figure><img src="https://2706939693-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FfbExO6yzRHDLBgKv08Jf%2Fuploads%2FbfOzxBfzye6LVWprPFbW%2FScreen%20Shot%202022-09-30%20at%200.23.06.png?alt=media&amp;token=1322629a-74f6-4e41-b9d5-eaad0514484f" alt=""><figcaption></figcaption></figure>