“Zero liquidation risk” is easy to read as “I can always manage the position cleanly.” TermMax Alpha separates those two ideas.
A Long or Short buyer pays the premium upfront, and that premium is also the maximum possible loss of the position. An adverse price move does not create the usual collateral-liquidation path.
But closing before maturity is a different problem. TermMax’s docs warn that an early close still requires a counterparty. If liquidity is thin, the position may be difficult to unwind or may require significant slippage.
That distinction matters. Liquidation risk asks whether the protocol can forcibly close you because collateral is insufficient. Exit-liquidity risk asks whether someone is willing to take the other side when you choose to leave.
Alpha can remove the first without removing the second.
So “no liquidation” does not mean “no market friction.” It describes how downside is bounded, not how liquid the position will be before maturity. For me, that is a much more useful way to read the risk of an option position than the headline alone.
@TermMax #TermMax $BTW $BLESS $BCH
A Long or Short buyer pays the premium upfront, and that premium is also the maximum possible loss of the position. An adverse price move does not create the usual collateral-liquidation path.
But closing before maturity is a different problem. TermMax’s docs warn that an early close still requires a counterparty. If liquidity is thin, the position may be difficult to unwind or may require significant slippage.
That distinction matters. Liquidation risk asks whether the protocol can forcibly close you because collateral is insufficient. Exit-liquidity risk asks whether someone is willing to take the other side when you choose to leave.
Alpha can remove the first without removing the second.
So “no liquidation” does not mean “no market friction.” It describes how downside is bounded, not how liquid the position will be before maturity. For me, that is a much more useful way to read the risk of an option position than the headline alone.
@TermMax #TermMax $BTW $BLESS $BCH
