Options and tokenized stocks can lose you money. Read this before you deposit into a vault or buy an option. Only use money you can afford to lose.
Vaults can lose value
- You give up the upside. An Income vault sells a call. If the stock closes above the strike on Friday, you keep the premium but are paid out at the strike, not at the higher price.
- You can still lose on a fall. The premium is small next to a big drop. If the stock falls 20%, an Income vault falls with it, less the premium.
- Buy the Dip buys on the way down. A Buy the Dip vault sells a put. If the stock closes below the strike, you buy it at the strike, above its price that day.
- Past yields are not future yields. The rates on the site are estimates from past weeks. Premiums change every week with the stock's price and volatility.
Bought options can go to zero
A call or put you buy in the market pays out only if it ends in the money at Friday's 4:00 pm ET close. Most weekly options expire worthless. The most you can lose is the premium you paid, and you can lose all of it.
Custody and software
- Elyo holds the escrow keys. Vault funds sit in escrow wallets whose keys are held by Elyo's servers. If those keys were stolen or misused, funds could be lost.
- Not audited. Elyo's code has not had an outside security audit. Bugs can cause losses or delays.
- Our ledger. Your positions and options are records in Elyo's ledger, not tokens in your wallet. If our servers are down you may not be able to act until they are back.
Prices and settlement
Strikes and settlements use a third-party price source. A wrong, late or missing price can settle a week at a price you think is wrong; once published, a settlement is final. If no price is available, the week can be voided or delayed.
Tokenized stocks
- xStocks are issued by a third party. They track a stock but are not the stock, and may not carry voting or other shareholder rights.
- They can trade away from the real stock's price, be hard to sell in size, or be paused or redeemed by their issuer.
- Stock splits, dividends and other corporate actions can pause a vault for a week.
Solana and wallets
- The Solana network can slow down or stop. Transactions you sign are final and cannot be reversed.
- If you lose your wallet's 12 words or keys, nobody can recover your funds, including us.
- USDC is issued by Circle; its value depends on its issuer.
Law and tax
- Rules on options and tokenized securities differ by country and can change. Elyo may not be available everywhere and may have to stop in some places.
- Premiums, payouts and settlements may be taxable where you live. You are responsible for your own taxes.
Nothing on Elyo is investment advice. If you are unsure, speak to a licensed adviser first. Questions: hello@useelyo.app.