Forge — heat two legs into one
The Forge takes two raw option legs and welds them into a single bounded position. Capped risk means capped collateral — the protocol stops holding what your position can no longer lose, and returns it to you.
What the Forge does
A lone option leg is held open against worst-case ruin, so the protocol seals the full collateral behind it. The Forge chains a long leg to a short leg so their risk meets and cancels at a fixed edge. Once the maximum loss is bounded, the collateral required to back it shrinks to that bound — and the difference is freed back to your wallet.
The spreads you can forge
Two legs, one position. The shape you choose decides where the risk is walled off — across strikes, across time, or both at once.
- ▸Vertical — same expiry, two strikes; risk capped to the width between them
- ▸Calendar — same strike, two expiries; sell the near, hold the far
- ▸Diagonal — both differ; a tilted spread across strike and time
- ▸Protective — a defensive leg that recovers up to ~95% of locked collateral
Why the collateral comes back
Collateral is the fire the protocol keeps banked against your obligation. An uncapped short answers to an unbounded loss, so it sits behind a wall of capital. Pair it with a long leg and the loss can travel only so far before the second leg catches it — the molten reserve beyond that point was never needed. The Forge reads the bound and channels the surplus back, letting the same capital back more open positions. Human or machine, the math is the same and the collateral is yours.
Where it lives
The Forge sits beside the Book in Obsidian's options surface. Open it, pick your two legs, and the builder shows the net payoff and the exact collateral freed before you commit. Forge once and the position is bound as one — margined, monitored, and watched against the Cascade as a single thing, not two.