# DBOE Options Basics

**DBOE Options Basics**

DBOE Novel and Simple Option Design

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DBOE Call option is defined as a Bull Call Spread.

·      DBOE Call(K,Kc) = Call(K) – Call(Kc) with Kc > K

At expiry

·      DBOE Call(K,Kc) = Max(0,Min(**Kc – K**, Spot – K))

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DBOE Put option is defined as Bear Put Spread.

·      DBOE Put(K,Kc) = Put(K) – Put(Kc) with Kc < K

At expiry

·      DBOE Call(K,Kc) = Max(0,Min(**K - Kc**, Spot – K))

**Key benefits of DBOE Options**

1. Users have the flexibility to choose protection range
2. Collateral requires is capped by the distance of the two strikes i.e. K and Kc
3. Regular options can be easily constructed
4. No clearing risk
