A put pays you the difference if the market rate ends up below an agreed price, the strike. Yours is $2.44/hr, your costs, spread over the hours you actually bill. If rates fall below it, the put ; if they rise, it expires and .
- Trade
- Buy put
- Strike
- $2.44
- Notional
- 7.18MM GPU-hrs
- Dollar notional
- $17.49MM
- Expiry
- 2Y NOV28
- Averaging
- NOV27–NOV28
Illustrative. Excludes the option premium.
What is this hedge for?Uncontracted capacity
When to use it
Use this when existing customer contracts end and your cluster must earn new rental revenue to cover debt service and operating costs.
How it converts
Divide the installed-hour breakeven cost by utilization to find the required rate per earned hour. GPUs times utilization times 730 hours times uncontracted months gives the put quantity. One average reference price across that window determines the payout.
What it doesn’t cover
A price hedge does not find customers or guarantee paid hours. A window-average payout can also leave an earlier monthly cash shortfall; matching individual payment dates would require a different hedge schedule.
Dollar notional (at reference) is GPU-hours times the reference price assumption. It describes the size of the inquiry, not the premium or a payment for GPUs. Option payouts are shown before premium; the premium needs a separate quote.
Learn more in From a business risk to a compute hedge. Its broader examples explore other products and assumptions; this calculator uses the formulas under “How this is calculated.”
How this is calculatedPut formulas
Strike is the price threshold. Notional is the GPU-hours multiplied by the option payout per hour.
- Exposed GPUs
- 1,024 GPUs
- Contracts roll off
- 12 month
- Breakeven rate
- 1.95 $/GPU-hr
- Uncontracted period
- 12 months
- Utilization
- 80 %
Strike = breakeven / utilization. Notional = GPUs x utilization x 730 x uncontracted months.
Strike = 1.95 / (80 / 100). Notional = 1,024 x (80 / 100) x 730 x 12.
Calculated strike: $2.4375000000 / GPU-hour. Notional: 7,176,192 GPU-hours.
Put payout = max(strike - settlement, 0) x notional. Percentages are converted to fractions. Calculations retain full precision.