Clearing V1

The Clearing Core

The clearing core mints options, holds the collateral behind them, and settles them in cash. Every option is backed by two things the writer brings: their own Hyperliquid perp, as a self-liquidating cover, and a small refundable option bond. The core keeps those two sufficient and resolves the option when it is exercised, expires, or the cover is force-closed.

What the core does

The clearing core is not an exchange and not an AMM. It does not run price discovery or hold the premium, which trades externally, wherever the market is. It mints the long and short legs as ERC-1155 tokens, tracks every writer’s outstanding shorts against their cover, prices the option bond from the volatility smile, and settles in cash. Anyone can write, and the rules are on-chain and identical for everyone.

The two pieces of collateral

Behind every written option sit two things, and it is worth being precise about what each does.

• The perp cover. A short call is covered by a long perp, a short put by a short perp. The perp funds the option’s intrinsic when it moves in-the-money, and it is self-liquidating: the only move that can force-close it is the one where the writer owes no intrinsic. HyperCore margins and liquidates it natively.
• The option bond. The core security: a refundable bond the writer locks at mint, sized to a conservative floor from the SVI smile priced through Black-Scholes on-chain. It stands behind the short for its whole life and refunds in full on a clean exit.

How an option flows

One option, from writing to settlement:

1. Open the cover. The writer opens a Hyperliquid perp sized to the option, on their own account. See HyperEVM & HyperCore for the account model.
2. Write. Lock the option bond and mint the pair: a long anyone can hold or trade, and a short bound to the writer’s cover. Four gates must pass first. See Writing Options.
3. Manage. Add margin, or trim perp notional down to the outstanding floor; the cover can never fall below what the shorts require. See Risk.
4. Settle in cash. In-the-money, the holder exercises and collects the intrinsic, funded by the cover, and the bond refunds. Out-of-the-money at expiry, the option lapses and the bond refunds. If HyperCore force-closes the cover, a resolution auction recollateralizes the short. See Exercise & Settlement, Liquidations, and Recollateralization Auction.

Every terminal path retires the short and frees the cover.

In this section

The rest of the section covers Spreads, Insurance, Keepers, Fees, Builder codes, and Admin.