A buy example
This example uses chosen prices and excludes all costs. The Contract price is illustrative and is not a suggested fair price.
| Term | Value |
|---|---|
| Yesterday’s reference K | 80,000 USDC per BTC |
| Execution price S | 84,000 USDC per BTC |
| Reference size n | 1 BTC |
| Gap | 5% |
| Split rate q | 2.5 |
| Seller input | 80,000 USDC |
| Conversion output R | 0.95238095 BTC |
| Buyer payment P | 0.01190476 BTC |
| Funded amount B | 0.96428571 BTC |
The buy direction is eligible because S is above K. The conversion output is rounded down to a whole satoshi, which is one hundred-millionth of a BTC.
Possible outcomes
Section titled “Possible outcomes”| Tomorrow's average (USDC/BTC) | Buyer payout | Seller payout | Buyer net | Seller net at entry |
|---|---|---|---|---|
| 84,000 | 0 | 0.96428571 | -0.01190476 | 0.01190476 |
| 80,000 | 0 | 0.96428571 | -0.01190476 | 0.01190476 |
| 79,000 | 0.03164556 | 0.93264015 | 0.0197408 | -0.0197408 |
| 10,000 | 0.96428571 | 0 | 0.95238095 | -0.95238095 |
Every row divides the same 0.96428571 BTC. These are BTC results, not USDC profit figures. The seller’s comparison uses the 0.95238095 BTC received at entry.
Follow the 79,000 result
Section titled “Follow the 79,000 result”Tomorrow’s average is 1,000 USDC below the reference. The buyer’s BTC allocation before the final rounding is:
2.5 × 1 × (80,000 - 79,000) / 79,000 BTCRounded down to satoshis, that is 0.03164556 BTC. The seller gets the rest: 0.93264015 BTC.
The buyer’s net result is 0.01974080 BTC after subtracting the payment. The seller is down the same amount compared with the BTC from immediate conversion at entry.
The division by 79,000 matters. It keeps the payout in BTC. Simply reusing the USDC formula would give the wrong unit and amount.
The fixed BTC price does not move
Section titled “The fixed BTC price does not move”If a later unfilled order still asks for 0.01190476 BTC, that BTC amount stays fixed. Its USDC display and the seller’s conversion output may change. This does not alter any earlier fill.