*This guide is accompanied by aninteractive spreadsheet(in order to modify the values, copy it with File -> Make a copy).*

On Quedex, price of an option can be introduced in a threefold manner:

- Price in BTC,
- Price in % Implied Volatility (IV),
- Price in % notional.

Price in BTC equals `Option Premium`

(just as in the examples above) **per $1 notional**. It represents the amount of BTC that will be deduced from your `Free Balance`

when you enter long position in it.

Alternatively, you could input the price as % IV, which is perhaps most straightforward.

Lastly, it is possible to enter the price as a % of Notional, which represents how much will you pay for the option relative to the $1 notional amount valued at the strike of the given option.

`% Notional = Option Price / Strike Price.`

% Notional of Quedex options is comparable with the options that have 1 Bitcoin notional size.

Moreover, Quedex offer two distinct ways of introducing the quantity of options to be purchased, namely:

- Quantity,
- BTC hedged,

where Quantity means simply the number of option contracts that are to be purchased and

`BTC hedged = 1 / Strike Price * Quantity,`

which gives the information on how much BTC is hedged by buying the contract.

Assume investor A (Alice) wants to protect herself against a fall of BTCUSD rate below $16500 level in a 1M time, where current BTCUSD rate equals $17000. She therefore wants to buy call options on strike $16500. Assume

- Bid IV = 135%,
- Ask IV = 150%.

If A wants to open a new position immediately, she has to put a bid on at least 150%, which would result in a price (recall formula for call option price) 0.00001107 BTC for one contract (Option Premium), or equivalently ~18% Notional. Assume A wants to hedge 0.5 BTC. She would therefore need to buy

`Quantity = 0.5 * 16500 = 7750`

of such contracts. Fortunately Quedex does not require its users to perform all the computations on their own - A could simply enter the `% IV`

and `BTC hedged`

she wishes to have and the webapp would automatically compute other quantities in the web app, in the Order Entry panel.