Settlement and Delivery Instructions

Settlement Rule

  1. The options contracts are settled every Friday at 16:00 (GMT+8). This time point is only for the system to clear the data of the realized PnL, transaction fees, delivery fees and delivery profits, and to calculate them into the static equity;
  2. At the settlement time, the unrealized PnL of unexpired options positions will not be liquidated;
  3. Users’ actual profit and loss will not be changed, and the account equity will not change before and after the settlement;
  4. Options that expire at the current day will not be settled but will be directly exercised for delivery. During the settlement period, trading is suspended; the functions like placing orders and trading will be recovered after the settlement.

 

Options Delivery Time

The delivery time of an option is at 16:00 (GMT+8) on the last Friday of a contract. After the positions being closed, the realized PnL (minus occupied margin, etc.) can be withdrawn at any time.

 

Options Delivery Price

The system uses the arithmetic average of index prices (eg: BTC/USDT index) in the last hour before the delivery as delivery price.

 

Options Delivery Rule

The options will be delivered on the expiration date. For in-the-money options, the system will deliver it in price difference between strike price and delivery price; while at-the-money and out-of-the-money options with positions not having been closed on the expiration date will automatically become invalid, and the performance margin will be released to the sellers.

Call options buyer: Delivery profit for buyer=Delivery price – Strike price* Position quantity * Face value/ Delivery price

Call options sellerDelivery profit for seller = -Delivery price - Strike price* Position quantity * Face value / Delivery price

The options seller pays delivery profits in the corresponding token of performance margin to the buyer and the remaining performance margin will be released to seller’s account.

Put options buyer: Delivery profit for buyer = Strike price - Delivery price* Position quantity * Face value

Put options seller: Delivery profit for seller = -Strike price - Delivery price* Position quantity * Face value

The Profit and loss generated by delivery are included in Realized PnL. Delivery fee will also be calculated into realized PnL.

Alex paid 500 USDT premium to buy 1000 conts of BTC call options with strike price 8000 USDT. Assume on the expiration date the delivery price is 10,000 USDT, Alex can get (10000 - 8000)* 0.001 * 1000 / 10000 = 0.2 BTC for exercising the options. While for the options seller, 1 BTC will be frozen as performance margin when he opens the position, and he will also receive 500 USDT as premium income. After the buyer exercises the options, 0.2 BTC will be deducted from the seller’s performance margin and the remaining 0.8 BTC will be released to the seller’s account.

Assume on the expiration date the delivery price is 10,000 USDT, then all call options with strike price higher than 10,000 USDT shall be regarded as invalid. (shown as OTM options in the History)

 

 

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