# Figuring out Atlantic Straddles：How to calculate PnL

By [Bee926](https://paragraph.com/@bee926) · 2022-09-19

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《Twitter🧵》

1/8

Did you buy the 1st round of Atlantic Straddles（AS）? If you did, congrats, ETH⏫15%🥳You're going to win big!

However, there was confusion about whether the LPs were going to lose $🤔

I was wrong about it too😅

Explore AS with me👇

![](https://storage.googleapis.com/papyrus_images/4d8c6d6ae6ed42da6c9f251f3c6e173940127a99662eeb0cfe7c0a626a9393c3.png)

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2/8

The most frequently asked question is:

🧐If there were winners then someone else must be losing $, right?

⚡Not in this case!

Thanks to [@Halko500k](https://twitter.com/Halko500k) for the article clarifying how the LP side operates👇

🔗[https://blog.dopex.io/articles/dopex-papers/atlantic-strategies-providing-liquidity-for-atlantic-straddles](https://blog.dopex.io/articles/dopex-papers/atlantic-strategies-providing-liquidity-for-atlantic-straddles)

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3/8

If you're a visual learner like myself, here are some visuals

Assume ETH Spot price = $1500 ；Both buyer + LP supply in [$USDC](https://twitter.com/search?q=%24USDC&src=cashtag_click)

Buyer buys 1 AS and receives 1 ETH AP(Atlantic Puts) back, then uses 1/2 to buy 0.5 ETH, so essentially

🔸Buyer's position = 0.5ETH Call + 0.5ETH Put

![](https://storage.googleapis.com/papyrus_images/96b9b715810a1ce53c564a8428b710c0a831a156a8119c8683878451bd500549.png)

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4/8

Now the LP side

LP supplies USDC collateral to sell AP (Atlantic Puts) only

🔸LP's position = 1 Short AP + Premium + Interest from lending out 1/2 of AP

![](https://storage.googleapis.com/papyrus_images/96b9b715810a1ce53c564a8428b710c0a831a156a8119c8683878451bd500549.png)

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5/8

What happens when there's huge volatility during the 3 day epoch?

Imagine 2 scenarios:

1️⃣ETH to🚀$2000

🔸Buyer's position: ⏫$250 from 0.5ETH Call (minus $premium & interest from borrowing)

🔸LP's position: ⏫$premium & interest from lending

![](https://storage.googleapis.com/papyrus_images/cea8faf442579bfa0004f1375bb72db498e55071d6e0b8f474880e8a34cfbdbf.png)

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6/8

2️⃣ETH📉to $1300

🔸Buyer's position: ⏫$100 from 0.5 ETH Put (minus $premium & interest from borrowing)

🔸LP's position: 🔻$200 from 1 AP (still earns $premium & interest from lending)

![](https://storage.googleapis.com/papyrus_images/cea8faf442579bfa0004f1375bb72db498e55071d6e0b8f474880e8a34cfbdbf.png)

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7/8

As we can see, because LPs sell Puts, LPs are exposed to 📉downside risks.

💡However, LPs will always earn💰$premium & lending interest. This will help offset some of the risks.

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8/8

If you are an LP and want to protect your downside, [@Halko500k](https://twitter.com/Halko500k)'s article explains how you can hedge with OTM puts and perps.

Personally I would love a ✨one-click hedge tool which hopefully already is in the works by the brilliant [@dopex\_io](https://twitter.com/dopex_io) team!

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*Originally published on [Bee926](https://paragraph.com/@bee926/figuring-out-atlantic-straddles-how-to-calculate-pnl)*