The AmPO
The Amortizing Perpetual Option is an option with no expiry whose size shrinks on a fixed schedule. It takes the place of two things other venues have, the expiry date of a listed option and the funding payments of a perpetual.
Perpetual
An AmPO never expires. There is no last day to exercise and nothing to roll. You can exercise, sell or hold for as long as there is anything left to hold.
Amortizing
Each market has a half-life, set when the market is created and never changed. Every half-life, the quantity of every open option in that market halves, for the holder and the writer alike.
| Time held | Quantity left (half-life of 7 days) |
|---|---|
| 0 days | 1,024 lots |
| 7 days | 512 lots |
| 14 days | 256 lots |
| 28 days | 64 lots |
The half-life above is an example. Each market states its own, and one token can trade on several markets with different half-lives. A short one suits a fast move and a long one a slow move.
Decay is continuous. After half a half-life, about 71% is left (2−½). It is measured against the Solana cluster's clock from the moment the market was created.
That shrinking is Runner's version of funding. On a perpetual future you pay a rate that moves with the market. Here you pay by holding less, at a rate fixed for the life of the market, and no cash changes hands.
A holder who does nothing keeps a claim that is always positive and always shrinking. A writer's obligation shrinks at the same rate, and the collateral behind the part that has decayed away is released back to the writer. See Collateral and the writer pool.