Coincall provides cash-settled European options, which automatically exercise and settle on the expiration date without the need for physical delivery of the underlying asset. The final profit and loss is determined by the difference between the settlement price and the strike price and are transferred to the user's account.
Note that if there are unfilled orders for the expired contract in the account when exercising the settlement, the platform will first cancel these unfilled orders and settle all positions for the contract at the strike price.
Settlement Price
The settlement price for options is the arithmetic average of the underlying index price 30 minutes before expiration.
Exercise Settlement Time
The exercise settlement time is 08:00 (UTC) on the expiration date of the contract.
Exercise Settlement Contract
The exercise settlement contract is the option contract with an expiration date on the same day.
Settlement Profit and Loss
The settlement profit and loss is the profit and loss obtained by holding the option until the expiration date and exercising the settlement.
Exercise Fee
The platform only charges exercise fees to both parties with actual profit and loss after exercise settlement, i.e. those holding in-the-money options.
For call options, the settlement price is greater than the strike price, which is an in-the-money option; for put options, the settlement price is less than the strike price, which is an in-the-money option.
Settlement PnL
Settlement PnL = Settlement income/expense - Opening income/expense
Settlement income/expense = MAX[(Settlement Price - Strike Price) * Strike Direction, 0] * Positions Amount * Position Direction.
Opening income and expense = Average Price of Position * Positions Amount * Buy and Sell Direction* (-1).
Direction | Number |
buy direction | +1 |
sell direction | -1 |
long position direction | +1 |
short position direction | -1 |
call strike direction | +1 |
put strike direction | -1 |
The settlement price is the average of the corresponding underlying price 30 minutes before expiration.
Example:
For a long position of 1 BTC face value BTC-31MAR23-40000-C option contract with an average holding price of $1,000:
a. If the settlement price is $50,000 (> 40,000), it is an in-the-money option, and there will be a cash flow after settlement:
Settlement income/expense = MAX[(50,000 - 40,000) * 1, 0] * position direction = $10,000 * position direction.
if it is a long position, position direction takes 1, settlement PnL is + $10,000;
if it is a short position, position direction takes -1, and settlement PnL is -$10,000 which means a loss.
Settlement PnL = Settlement income/expense +/- premium
For the buyer:
the opening expense is 1 * 1,000 * (-1) = -$1,000, the buyer's settlement gain = 10,000 - 1,000= $9,000
For the seller:
the opening loss is 1 * 1,000 * (+1) = + $1,000, the seller's settlement loss = -10,000 + 1,000= -$9,000
Exercise Fee = min(1 * 50,000 * 0.015%), 1*abs(40,000-50,000)*12.5%)= $7.5.
$7.5 will be deducted from both long and short positions, and 7.5+7.5= $15 will be the income for the exchange.
b. If the settlement price is 40,000 (= 40,000), it is an at-the-money option, and there will be no cash flow after settlement:
Settlement income/expense = MAX[(40,000-40,000) * 1, 0] * position direction = 0
Settlement PnL = Settlement income/expense +/- premium
For the buyer:
the opening loss is 1 * 1,000 * (-1)= -$1,000, the buyer's settlement loss = 0-1,000= -$1,000
For the seller:
the opening income is 1 * 1,000 * (+1)= +$1,000, the seller's settlement gain = 0+1,000= $1,000
No exercise fee is charged.
c. If the settlement price is 30,000 (< 40,000), it is an out-of-the-money option, and there will be no cash flow after settlement:
Settlement income/expense = MAX[(30,000-40,000) * 1, 0] * position direction = 0
Settlement PnL = Settlement income/expense +/- premium
For the buyer:
the opening loss is 1 * 1,000 * (-1) = -$1,000, the buyer's settlement loss = 0-1,000=-$1,000
For the seller:
the opening income is 1 * 1,000 * (+1) = +$1,000, the seller's settlement gain = 0+1,000= $1,000,
No exercise fee is charged.
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