How Can a Smart Contract Be Used to Automate an Options Trading Strategy?

A smart contract can automate an options trading strategy by acting as a trustless escrow and execution agent. It can be programmed to monitor real-time price feeds via oracles.

For example, it can automatically execute a "covered call" or a "straddle" strategy by locking up collateral and releasing the option based on pre-defined market conditions and expiration dates. This removes the need for a traditional brokerage intermediary and reduces counterparty risk.