BIT option contracts are European-style options, and buyers and sellers will make cash delivery on the expiration date.
For option contracts that expire, the system takes the average of the index price of underlying asset 30 minutes before expiration as the option delivery price, and determines whether to exercise the option based on the relationship between the strike price and the delivery price of the option.
For ITM options, the platform will help users to exercise the options automatically. For ATM options and OTM options, the platform will automatically void them. Details are as follows.
|
Option Value |
Call Option |
Put option |
Exercise Result |
|
ITM |
Strike price＜Delivery price |
Strike price > Delivery price |
Automatic exercise, seller pays settlement value to buyer. |
|
ATM |
Strike price = Delivery price |
No exercise |
|
|
OTM |
Strike price > Delivery price |
Strike price＜Delivery price |
No exercise |
When the option is exercised, the system will transfer the settlement value from the seller's account to the buyer's account, and release the seller's frozen margin.
USD-margined option settlement value = (delivery price - strike price) * position size (currency)
Example.
Amy has the following option positions.
Amy holds a long position of BTC-USD-24JUN22-30000-C that is going to expire, the position size is 0.5 BTC and the delivery price is 40,000 USD.
As it's a call option and strike price 30,000 < delivery price 40,000, it is an ITM option and will be automatically exercised by the platform.
Settlement value =|(delivery price - strike price) * position size|
= (40,000 - 30,000) * 0.5
= 5000 USD
Delivery fee
Delivery fee rate:
0% for daily options
0.015% for all other options (Delivery fee cannot be higher than 12.5% of the option value)