The basket options strategy involves Tether's gold-backed token, XAUT, and ether as underlying assets and a safety component that protects users from a 30% drop in the tokens' prices.structured products, which offer decent returns, market exposure and protection from losses and were previously available only to institutional investors in traditional markets.
Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a predetermined price at a later date. A call gives the right to buy and a put gives the right to sell. A basket option gives the option holder the right to buy or sell the basket of underlying assets, in Cega's case, ETH and XAUT, at a preset price at a later date.
If neither of the assets drop that much, users receive the principal in full, along with the yield, which is accrued daily. On the flip side, if either does breach the 30% downside barrier, the principal returned on expiry is adjusted for the loss from the worst-performing asset. The user still retains the yield.
According to Cega, even in the worst-case scenario, users earn more than they would from holding long XAUT/USD or ETH/USD positions.
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Source: CoinDesk - 🏆 291. / 63 Read more »