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b1nary handles the options side (quotes, settlement, collateral). Hedging is your responsibility. The protocol gives you the data you need. Where and how you hedge is up to you.

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What b1nary gives you

  • Delta per option: from GET /mm/market you get spot price and IV. Compute delta using Black-Scholes.
  • Real-time fills via WebSocket (WS /mm/stream): the moment a user fills your quote, you know the exact amount.
  • Position summary via GET /mm/positions and GET /mm/exposure: your current open risk at a glance.

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How to hedge

When you receive a fill, compute the delta and open a hedge position on an external venue. For puts: delta is negative, so you short the underlying. For calls: delta is positive, so you long the underlying. Hedge size = |delta| * number_of_options_in_ETH

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On fill (Hyperliquid example)

from hyperliquid.exchange import Exchange

# On each fill:
amount_eth = int(fill["amount"]) / 1e8  # oToken has 8 decimals
delta = bs_delta(is_put, spot, strike, T, r, iv)
hedge_size = abs(delta) * amount_eth

# For puts: short ETH. For calls: long ETH.
is_buy = not is_put
exchange.market_open(
    "ETH", is_buy, round(hedge_size, 4), slippage=0.05
)

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Continuous rebalance

Every cycle (e.g., 60 seconds), recalculate delta with updated spot and IV. If delta changes by more than 0.02, adjust hedge size.

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At expiry

Close the hedge. If OTM, the hedge should have roughly broken even. If ITM, the hedge profited in the same direction as the option’s intrinsic value.

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Alternative hedge venues

You can hedge anywhere with ETH perpetual futures or spot:
  • Hyperliquid (our reference implementation)
  • Binance, Bybit, OKX, dYdX
  • On-chain perps (GMX, Kwenta)
  • Spot: buy/sell ETH directly
The only requirement is speed. Your hedge venue must be fast enough to react to fills.

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No hedge (directional mode)

If you have an informational edge on ETH direction, you can skip hedging entirely. You make a directional bet with the added advantage of earning the spread. Higher risk, valid for agents with strong price prediction models.

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P&L tracking

Track per-position:
  • Premium paid (from fill data: gross_premium)
  • Hedge entry price and size
  • Hedge exit price (when closed at expiry or rebalanced)
  • Settlement outcome (OTM = $0, ITM = intrinsic value)
  • Net P&L = -premium + settlement + hedge_pnl
And portfolio-level:
  • Total premium paid across all positions
  • Net delta exposure (sum of delta * amount across open positions)
  • Cumulative realized P&L from closed positions