Decentralized Options Trading Platform

A secure and flexible smart contract platform for trading call and put options on the Stacks blockchain. This platform enables users to write, buy, and exercise options contracts using SIP-010 compliant tokens as collateral.

Features

• Write and trade both CALL and PUT options
• SIP-010 token support with whitelisting
• Built-in price oracle integration
• Collateral management system
• Position tracking for writers and holders
• Protocol fee management
• Comprehensive error handling and input validation

Contract Overview

Core Functionality

• Option Writing: Create new options contracts by locking collateral
• Option Trading: Buy existing options by paying the premium
• Option Exercise: Exercise options before expiry if conditions are favorable
• Position Management: Track written and held options for each user
• Price Feeds: Oracle integration for accurate price data
• Protocol Governance: Fee management and token whitelisting

Security Features

• Comprehensive input validation
• Protected admin functions
• Collateral requirement checks
• Critical token/symbol protection
• Expiry validation
• Authorization checks

Technical Details

Data Structures

Option Contract

{
    writer: principal,
    holder: (optional principal),
    collateral-amount: uint,
    strike-price: uint,
    premium: uint,
    expiry: uint,
    is-exercised: bool,
    option-type: (string-ascii 4),  // "CALL" or "PUT"
    state: (string-ascii 9)         // Current state of the option
}

User Position

{
    written-options: (list 10 uint),
    held-options: (list 10 uint),
    total-collateral-locked: uint
}

Error Codes

Code	Description
1000	Not authorized
1001	Insufficient balance
1002	Invalid expiry
1003	Invalid strike price
1004	Option not found
1005	Option expired
1006	Insufficient collateral
1007	Already exercised
1008	Invalid premium
1009	Invalid token
1010	Invalid symbol
1011	Invalid timestamp
1012	Invalid address
1013	Zero address
1014	Empty symbol

Usage

Writing an Option

(write-option
    token              ;; SIP-010 token used as collateral
    collateral-amount  ;; Amount of collateral to lock
    strike-price      ;; Strike price of the option
    premium           ;; Premium charged for the option
    expiry            ;; Block height at which option expires
    option-type)      ;; "CALL" or "PUT"

Buying an Option

(buy-option
    token      ;; SIP-010 token for premium payment
    option-id) ;; ID of the option to purchase

Exercising an Option

(exercise-option
    token      ;; SIP-010 token for settlement
    option-id) ;; ID of the option to exercise

Administrative Functions

Protocol Management

• set-protocol-fee-rate: Update the protocol fee rate
• set-approved-token: Whitelist or remove tokens
• set-allowed-symbol: Manage allowed price feed symbols
• update-price-feed: Update price data for supported trading pairs

Security Considerations

1. Collateral Management

   • Collateral is locked in the contract
   • Automatic collateral return after exercise
   • Protected against unauthorized withdrawals

2. Price Feed Security

   • Only owner can update price feeds
   • Timestamp validation
   • Symbol whitelist

3. Token Safety

   • SIP-010 compliance requirement
   • Token whitelist
   • Critical token protection

Development and Testing

Prerequisites

• Clarity CLI
• Stacks blockchain node (optional for testing)
• SIP-010 compliant tokens for testing

Deployment Checklist

1. Deploy contract
2. Set initial protocol fee rate
3. Whitelist accepted tokens
4. Configure allowed price feed symbols
5. Set up initial price feeds

Limitations

• Maximum of 10 options per user position list
• Only supports SIP-010 compliant tokens
• Price feeds must be manually updated by contract owner
• Options cannot be cancelled once written
• No partial exercise functionality

Future Improvements

1. Secondary market for options trading
2. Automated price feed updates
3. Partial exercise functionality
4. Option cancellation mechanism
5. Dynamic collateral requirements
6. Multi-asset options
7. American vs European option types

License

This project is licensed under the MIT License. See the LICENSE file for details.