Olea, precisely

Olea is a web page that writes, lists, buys, exercises and redeems fully collateralised options on the tokenized stocks of Robinhood Chain. It holds nothing and deploys nothing. Every transaction it builds is a call from your own wallet to one of three kinds of contract that were already there: a token (a stock, or the dollar USDG), the Valorem Options Clearinghouse, or Seaport 1.6.

A covered call is a promise to sell shares you hold at your strike, before your date, if the buyer wants them. A cash-secured put is a promise to buy shares with dollars you hold, at your strike, before your date, if the buyer wants to sell. In both cases the buyer pays you now for the promise, and what you promise is locked in Valorem until the promise ends.

The option, exactly

Valorem stores a series as six numbers: what is locked and how much per option, what exercising costs and how much per option, when exercising may start and when the option expires. Olea fixes all of them the same way for every series it writes, so that options on the same stock, strike and Friday are interchangeable between writers:

• One unit is one hundredth of a share. A call locks 10¹⁶ of an 18-decimal stock per unit. A $360.00 strike costs $3.60 per unit to exercise, exactly 3,600,000 in USDG's own units. Strikes are whole cents, and no floating-point number ever reaches an amount.
• A put is the mirror. It locks strike ÷ 100 USDG per unit, and exercising it delivers 10¹⁶ of the stock per unit.
• Expiry is a Friday at 20:00 UTC. That is 4pm in New York while daylight saving lasts, when the underlying market closes, and an hour after the close in winter. The app offers the next eight Fridays, none closer than a day.
• Exercisable at once and until expiry ("American"): the start time is zero.
• Assignment. When several people write the same series, Valorem spreads each exercise over their claims by its own seeded rule, not first-come. Between them the claims always hand back exactly what was locked, which a property checks (T5 below).

The id of a series is the first 20 bytes of keccak256(abi.encode(the six numbers)), shifted left 96 bits. The page computes it before anything exists, and property 1 asks Valorem's own newOptionType for the same series and compares. A claim id is the option id plus a claim number in the low 96 bits. A claim is your receipt, and the page never lists one for sale.

Every transaction

A wallet that can send several calls as one atomic batch (EIP-5792) gets them in one request, and any other wallet gets them one at a time. Before any wallet is asked, the page reads every call it built back through its own inspector (assertWrite, assertList, assertBuy, assertExercise in js/order.js). The inspector refuses an approval for more than the action needs, a purchase sent anywhere but Seaport, options sent to anyone but you, a listing that pays anyone but its writer, and a write that registers a different series from the one on screen.

The board

There is no Olea server. The list of options for sale is Seaport's own OrderValidated log, read straight from Robinhood's node. The page scans from the block Valorem was deployed (59,378,584, Sep 10) a million blocks at a time, halving any range the node calls too heavy. It keeps only orders that offer exactly one Valorem option and ask exactly one USDG payment to their writer, and it reads each of them back at one block.

A listing shows as buyable only if Seaport has it, it is not cancelled or sold out, the writer's counter has not moved, the listing and the option are both still open, the writer still holds the options, and Seaport may deliver them. Otherwise it shows the first reason it cannot be bought. Only Robinhood's own node is asked for history: another public node answers old log queries with an empty list, which would read as "nobody has listed anything".

Valorem, read back

The clearinghouse at 0x9a7b40e5c1dB1Af822ef091c990b58b02C78C0C0 was deployed on Sep 10 by an address that is not ours. tools/verify-source.mjs fetches its verified source and Valorem's repository (valorem-labs-inc/clear) and compares them line by line. A control with one changed character must be caught. The source on this chain matches the repository's master. Against the tagged release v1.0.0, it differs in 3 lines:

Zellic audited Valorem's code in December 2022 and April 2023, and the reports are in that repository. We do not know which of the two versions the April report covers. We say so, and do not call this copy audited. The practical difference is two numbers: the fee, if ever switched on, would be 0.15% rather than 0.05%, and a series may expire one minute after it is written rather than one day. The page never writes a series closer than a day.

The fee switch belongs to 0xdAe7e82A2E7D566C67E87C164B05a1C560190782. It can turn a 0.15% fee on writing and exercising on or off, sweep what it has collected, and nothing else. It cannot touch collateral. It is off at block 67,330,607, and the app reads it again before every transaction and adds it to what you approve if it is ever on. The clearinghouse has 65 series registered and 3 writes so far, none of them by this site.

Which stocks

A stock is listed only if Robinhood publishes a price feed for it on this chain, because that price is what the strike ladder, "how far from today's price" and the fair-price estimate are measured against. Feeds are not enumerable, so tools/scan-market.mjs finds them through Morpho Blue's markets, whose oracles name them. It found 35 stocks with a genuine Robinhood feed at block 67,374,434. It set aside 15, 15 of them because their "feed" was a Uniswap pool's price read back, which is not Robinhood's. 2,719 misprinted rounds were dropped, every one of them from Jun 22–Jun 23, the feeds' first days, when answers were written at 18 decimals instead of 8.

Set aside

The fair price

Beside every price, the page shows what the option would be worth under Black–Scholes with a zero interest rate (USDG pays nothing here). It uses the stock's current Robinhood price and its measured volatility: the annualised standard deviation of its last 30 daily log returns, with each day's close taken as the feed's price at 20:00 UTC. Measured swings run from SGOV 0.7% to NBIS 111% a year.

It is an estimate, and the page calls it one. Past swings are not future swings, real options markets price in things this model does not, and on a new market with few buyers the price is whatever a buyer will actually pay, which may be much less. The same function also gives the model's chance that an option ends in the money, which is the number a writer most needs: how likely am I to part with the shares?

The backtest

tools/backtest.mjs writes a one-week covered call 5% above the price, every Friday, on every listed stock, over the weeks Robinhood's feeds cover with 30 days of history before them. Each call is priced fairly from that stock's trailing measured volatility, which is generous to the writer because it assumes a buyer paid that. At the next Friday's close, if the stock is above the strike, the shares are called away at the strike.

• 204 stock-weeks, 35 stocks, Fridays Aug 7 to Sep 11.
• Called away in 23% of weeks. The model expected 24%.
• Median payment 1.43% of the price a week. It is pulled up by the most volatile stocks, and far lower on steady ones.
• Summed across every stock-week: 382 pts collected, 274 pts given up above strikes.
• The covered call did better than just holding in 84% of weeks. Mean weekly return was 1.79% written against 1.26% held.
• The worst single week: NBIS, the week of Aug 7, when 42% of the price went above the strike to the buyer.

6 Fridays is a short window, and in it these stocks rose 1.26% a week on average, which is when a covered call gives most away. Treat this as evidence of how the trade-off behaves, not as a forecast. Every week is in data/backtest.json.

What it costs to use

Olea charges nothing. You pay the chain's gas, measured by tools/probe-gas.mjs on a fork at 0.0685 gwei with ETH at $2,637.20 (Robinhood's own ETH/USD feed):

• Write and list a new series, first time from this wallet: $0.104
• Write and list, series already registered, Seaport already allowed: $0.053
• Buy: $0.032 · Exercise: $0.036 · Redeem: $0.020 · Take down: $0.007

Risks

• A covered call caps your gains. Above the strike, the rest of the rise goes to the buyer. See the backtest.
• A put can make you buy a falling stock at more than it is worth.
• Nobody may buy. This is a new market. Your collateral stays locked until Friday either way, unless you exercise your own unsold options, which costs you the strike until Friday.
• Locked means locked. Once sold, the shares or dollars stay in Valorem until the buyer exercises or Friday passes.
• The stock token can be paused. Robinhood's stock tokens have a pause switch and an administrator. A paused stock cannot be written, exercised or redeemed until it is unpaused.
• Contract risk. Valorem and Seaport are other people's code. Valorem's copy here differs from its audited release in three named lines. Olea is not audited.
• The fair price is a model. It can be wrong in either direction.
• Not advice, and not everywhere. Tokenized stocks on Robinhood Chain are not available in every country. Nothing here is an offer by us.

How it is checked

Every figure on these pages comes from a file in data/ written by a tool, and the build refuses to publish a page with a figure missing. The checks, and their latest results:

Not built

• No matching and no market maker. Writers list, buyers buy. There are no bids, no quotes from anyone else and no automatic pricing beyond the estimate.
• No early close for a sold option. You cannot buy back an option someone else holds unless they list it.
• No other expiries or styles. Fridays only, American only, one hundredth of a share per unit.
• No native ETH, no spreads, no margin. Every option is backed in full by what it promises.
• No alerts. Nothing will tell you your option is in the money, or that your claim can be redeemed. Look at "Yours".