TON Hedge: Options on TON

The TON price can jump or sink, and a coin holder wants either to hedge or to bet on the move. That is what options are for, and TON Hedge offers them right inside Telegram. 📈

The profile calls the app a mini app for trading options on TON on-chain. It also carries an honest warning: this is an alpha version, to be used at your own risk.

An option in plain words

An option is a right, not an obligation, to buy or sell an asset at an agreed price before a certain date. You pay a premium for that right. If the market goes the wrong way, you lose the premium and no more.

• Call. A bet on growth. It pays if the price rises above the agreed level.
• Put. A bet on a fall, or insurance. Useful when a coin holder fears a drawdown.
• Premium. The price of the option. Paid up front and not returned.
• Cash settlement. Settled in money rather than delivery of coins, according to descriptions of projects of this type.

Two roles in the app

According to the project, there are two modes. You can buy put and call options to hedge risk or profit from sharp price moves. Or you can provide USDT liquidity and earn from the selling of options.

A smart contract handles selling and exercising options, so the process is transparent: the terms are written in code, not in someone's promise.

Where liquidity providers' income comes from

Whoever supplies USDT effectively acts as an option seller. They collect premiums but take on the risk of payouts when the market moves sharply.

This is not a bank deposit. Good months of accumulated premiums can be followed by a bad stretch when payouts eat the profit and part of the principal.

Risks stated plainly

1. Alpha version. The product can contain bugs, and a smart contract can have vulnerabilities.
2. Losing the whole premium. An option can expire worthless and the amount burns.
3. Seller losses. By providing liquidity you can end up at a loss.
4. Thin liquidity. With few users, prices and terms can be unfavorable.
5. Currency of information. Details about the project can go stale. Read the news in the official channel before depositing money.

A sensible approach

If you still want to try, begin with an amount whose loss will not change your life. First learn how an option works on paper: draw the payoff chart at different prices.

• Your own wallet only. Connect through the standard TON method and check what you confirm.
• Secret phrase. Neither the project nor its admins ask for it. Tell nobody.
• No borrowing. Trading with borrowed money magnifies losses.
• Interface. The app is in English, so read the terms carefully to avoid pressing the wrong button.

Nothing here is financial advice. Options are complex instruments, and most beginners lose money.