🧝‍♀️Covered Put

You buy a covered put when you are bearish on the price of the underlying and thinks it will trade lower in the future.

You then hedge by buying this contract and have a great leverage to make gains.

The writer of the contract must escrow ERC20 LORDS tokens as underlying, therefore deposit the asset in the contract.

Each Put Option Contract is represented as an ERC721 asset that can be sold on the marketplace.

It is minted when writer creates the contract by putting his LORDS as underlying.

When one sells his NFT option he loses the ownership of it obviously. Though, one must be aware that the initial writer of the NFT contract still owns the underlying LORDS.

By buying such a contract you just pay a premium to have the right to exercise at expiration.

In this case, if odds are by your side, then you will exercise to sell at specific strike (higher than the spot price in the future)