Market Maker / LP Program

ClickOptions integrates professional Market Makers (MMs) to ensure continuous, competitive, and transparent option pricing.

Key Difference Unlike traditional exchanges where each short option requires separate maintenance margin, ClickOptions uses a portfolio margin model.

• Vault = the settlement pool.

• MMs = price feed providers, not fund managers.

• MMs must lock capital into the Vault like any regular contributor, ensuring aligned incentives.

Onboarding

1. Capital Lock

   • Each Market Maker must lock capital in the Vault as a regular contributor.

   • Requirement: 250k–1M USDT (decided by ClickOptions).

2. Acknowledgment

   • The Market Maker operates as a price feed provider only.

   • They do not control Vault assets directly.

3. Integration

   • Connectivity via API/FIX protocols.

   • Mass quote + risk controls supported.

Quoting Obligations

• Asset Coverage → Quotes must be provided for all listed assets.

• Discounted Quotes → At least 25% of quotes must be priced below external venues.

• Arbitrage Gaps → At least 5% of quotes must intentionally create arbitrage spreads (ClickOptions ASK < external BID).

• Spread Limits → Adaptive by moneyness & tenor:

  • Near ATM, short-dated: ≤ 1–2%

  • Far OTM/ITM or long-dated: flexible up to 45%

• Size Requirements:

  • Best of Book: ≥ 0.1 BTC / 1 ETH

  • Depth of Book: ≥ 5 BTC / 100 ETH at key ATM, short-term strikes

  • Adaptive to option moneyness & tenor

• Presence Ratio → Must quote 24/7, ≥ 99.9% uptime on liquid contracts.

Scoring & Performance

• Quote Presence: ≥ 99.9% uptime for liquid pairs.

• Quote Quality: Fulfillment of discounted (25%) + arbitrage (5%) rules.

• Depth: Maintain minimum depth at ATM & short-term strikes.

• Adaptiveness: Responsiveness to Vault utilization and portfolio exposures.

• Review: Performance scored monthly; incentives adjusted based on results.

Risk Protection Limits

ClickVault has portfolio-based risk controls at the Vault level (CAR, Coverage Ratio). On top of this, Market Makers are subject to dynamic thresholds for Delta, Vega, and Quantity, scaled to Vault size:

Market Maker risk limits scale dynamically with Vault size.

Limit Type	Formula	Scaling Factor	Example
Delta Limit	$$\Delta_{\text{limit}} = \alpha \times \frac{\text{VaultCapital}}{\text{IndexPrice}}$$	α = 0.5 (50%)	$$\Delta_{\text{limit}} = 0.5 \times \frac{10{,}000{,}000}{100{,}000} = 50 \, BTC$$
Vega Limit	$$\text{Vega}_{\text{limit}} = \beta \times \text{VaultCapital}$$	β = 0.02 (2%)	$$\text{Vega}_{\text{limit}} = 0.02 \times 10{,}000{,}000 = 200{,}000 \, USD$$
Quantity Limit (per 2s interval)	$$Q_{\text{limit}} = \gamma \times \frac{\text{VaultCapital}}{\text{IndexPrice}}$$	γ = 0.1 (10%)	$$Q_{\text{limit}} = 0.1 \times \frac{10{,}000{,}000}{100{,}000} = 10 \, BTC$$

Additional Controls

• Frozen Interval: 5 seconds before new quotes allowed.

Incentives

Incentive Type	Formula / Mechanism	Notes
Revenue Share	$$\text{MM Share} = \frac{\text{MM Vault Deposit}}{\text{Total Vault Capital}} \times \text{Vaut performance}$$	Revenue share is proportional to MM’s Vault stake ratio.
Fee Rebates (Negative Maker Fees)	Execution rebates applied automatically	Encourages tight spreads and liquidity.
Variable Rewards	Monthly incentive multipliers applied based on scoring.	Higher score = higher rebate tier.

Penalties

• Non-Compliance: Rebates reduced, suspension of revenue share, or termination.

• Abuse: Wide/fake quotes or manipulation → exclusion.

• Underperformance: Repeated failures (< thresholds for 2 months) = downgrade or termination.