Go Short

You have an NFT and if you're thinking that floor price will go down, go short and sell NFTs with making profit at downside.

When to use

  • You’re bearish on a collection over a specific time window.

  • You want downside for an NFT and sell it with profit.

  • You want clear, capped upside risk.

How it works (step-by-step)

  1. Pick a short position → Select a short position from a collection.

  2. Pay buy price → buy price = (strike price)/10

  3. Protocol fee → 25% of the buy price (not the strike) is removed and 75% of buy price is being sent to the market maker.

  4. Position is now open → Your position is now ready. You have rights to close your position before expiry days. (max 7 days as start)

  5. At expiry → You won't have rights to finalize your position anymore. Market Maker can finalize your position. Which means that they'll close your position, take their INJ back. You won't be charged at this phase. Don't worry

  6. Your PnL → PnL = floor − total upfront.

At 4th Step, you have two options :

  • If NFT floor price goes down before expiry time, you're on profit !

  • If NFT floor price goes up before or after expriy, you'll only loose 10% (buy price) of the NFT price which is settled at your first position opening time. But also you can buy the selected short position in order to sell your NFT for a loss.

Worked Example

  • Collection Price At Go Short (F) : 10 INJ

Option Long (Bob)

  • Strike (K): 10 INJ

  • Buy price (premium, P): 1 INJ

  • Fee (25% of P): 0.25 INJ

Alice buys this short position from Bob. Alice pays the Premium (P) and Alice's short position starts. Alice can have two scenarios that she can do in 7 days before expiry:

Outcome A (bullish wins):

  • Floor price is 5 INJ at day 3

  • Alice finalizes her position by giving NFT to Bob

  • Contract finalizes the position by giving K to Alice and giving NFT to Bob

  • Alice payed 1 INJ (buy price) to sell an NFT + get 10 INJ (strike) which is now at 5 INJ floor.

  • PnL = 4 INJ !

Outcome B (flat/down):

  • Floor price is 15 INJ at day 6 (will be expired soon !)

  • Alice won't finalize her own position.

  • PnL = -1 INJ only (buy price)

Summary

At short positions, you can be profitable but also you can run away with capped losses ! This is the smart way of shorting NFTs.

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