> For the complete documentation index, see [llms.txt](https://asteria.gitbook.io/asteria/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://asteria.gitbook.io/asteria/protocol-layer/asteria-options-trading-protocol-aotp.md).

# Asteria Options Trading Protocol (AOTP)

**Asteria Options Trading Protocol (AOTP)** defines decentralized **Automated Options Market Making (AOMM)** mechanism based on the On-Chain Shared Liquidity Pool infrastructure. Through AOMM, AOTP achieves **real-time pricing** and **quantity quotation** on customizable option structures and automatic exercising for option settlements.

Through AOTP, ordinary investors can benefit from options market making that generally is only achievable by large professional institutions in traditional finance. By staking into Asteria's on-chain shared liquidity pool, operated and protected by AOTP, investors automatically contribute market-making capital and share the benefits. AOTP also implements **Delta Hedging** as professional risk management, with an **Aggregator** mechanism to dynamically adjust positions on spot, perpetual swap, and other options market elevate the capital efficiency of the shared liquidity pool, which significantly enhances the system stability and ensures the safety of market makers' capital.

Meanwhile, financial engineering technologies such as the **Black-Scholes** model and **dynamic Volatility estimation** deploy options pricing and quantity quotations expertly. AOTP also applies the **Non Fungible Tokens** on **ERC1155** protocol to map options participants' rights and obligations and integrate a platform token mining scheme. The AOTP NFT, by its unalterable and transferable nature, will ignite the options OTC market, significantly expanding options trading dimensions and boosting the total market liquidity.

In short, AOTP brings the AOMM mechanism on-chain, implementing intelligent risk management and a specialized options pricing model. Using smart contracts and integrating state-of-the-art Oracle and L2 solutions, Asteria is building the next generation of decentralized option trading platforms as **Professional as Morgan Stanley** and as **Straightforward as Uniswap.**