# Bullish accumulation

Bob owns 100 ETH and wants to accumulate more of it. Lending out ETH for a month is not an option as it only yields 0.01%. Bob is willing to accept some small risk of losing his ETH in exchange for a higher yield. His conservative estimate is that ETH/USD will be above $2'000 in a month. The current ETH price is $3,500.

Alice is bearish on ETH/USD and believes that the price will be below $2'000 in a month. She would like to benefit when the price goes down.

### :gear: Pool configuration

Bob uses the DIVA App to create a long position that is going to return his deposited collateral when ETH/USD stays above $2'000. Bob's yield comes from selling the short position to Alice. An example configuration is provided below: 

![Example configuration of a low risk yield product using the DIVA App.](https://1305042189-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FHZJ0AbZj1fc1i5a58eEE%2Fuploads%2FuhUKpTMXeXfZS8zlMkOe%2Fimage.png?alt=media\&token=ae90a665-a849-465a-9192-4030a18bb7ef)

### :handshake: Sell short position tokens

After creating the pool, Bob sells all 100 short position tokens minted for a total of WETH 3 to Alice and keeps the long position tokens. The payoff profiles for Alice and Bob are depicted below:

![Bob's payoff profile](https://1305042189-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FHZJ0AbZj1fc1i5a58eEE%2Fuploads%2F8qDu6xeL8iNqVjFIclAI%2Fimage.png?alt=media\&token=f4756660-2e39-491b-8fe0-d0e6e4ba2ed1)

![Alice's payoff profile](https://1305042189-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FHZJ0AbZj1fc1i5a58eEE%2Fuploads%2FNYxV3pGZhLM6P82Hw8pd%2Fimage.png?alt=media\&token=a636a96e-77c7-405f-b5ee-6ab977129f66)

### 💵 Payoff scenarios

1\) ETH/USD >= $2'000:

* Bob can redeem his collateral of 100 WETH and keep the premium of 3 WETH from selling the short position tokens to Alice \
  -> <mark style="color:green;">**net gain for Bob: WETH 3**</mark> (+3% in a month, +36% in a year).\
  -> <mark style="color:orange;">**net loss for Alice: WETH 3**</mark>

2\) ETH/USD = $1'250:

* Bob can redeem WETH 25 of his collateral and keep the premium of 3 WETH\
  -> <mark style="color:orange;">**net loss for Bob: WETH 72**</mark>\
  -> <mark style="color:green;">**net gain for Alice: WETH 72**</mark> (24x on her investment)

3\) ETH/USD = $800:

* Bob received a premium of 3 WETH and loses the initially deposited collateral of WETH 100\
  -> <mark style="color:orange;">**net loss for Bob: DAI 97**</mark>\
  -> <mark style="color:green;">**net gain for Alice: DAI 97**</mark> (32.3x on her investment)