If you do not exercise your long options, the option expires worthless. If you want to exercise your long options, you need to submit exercise instructions on the platform in Balances & History >Exercise Instructions. There is no auto-exercise, meaning LedgerX will not exercise options on your behalf.
Options on LedgerX are physically-settled and there is no settlement index, meaning LedgerX will not determine if your options are in-the-money or out-the-money at settlement. Exercise is dependent on the user submitting exercise instructions on the platform.
Call Options at Expiration & Settlement
At time of trade execution:
- The long holder paid a USD premium to the seller for the option.
- The short holder received this USD at time of trade.
- The underlying bitcoin is Position Locked on the short holder's account at time of trade.
At expiration/settlement:
- If the long holder exercises, they pay the USD strike price to buy bitcoin. Bitcoin is transferred to the buyer's LedgerX account at settlement, and USD is transferred to the seller's account at settlement.
- If the long holder does not exercise, the option expires worthless. The underlying bitcoin that is Position Locked on the short holder's account is unlocked at 5pm settlement and made Available for Trading in the short holder's account.
Put Options at Expiration & Settlement
At time of trade execution:
- The long holder paid a USD premium to the seller for the option.
- The short holder received this USD at time of trade.
- The underlying USD strike price is Position Locked on the short holder's account at time of trade.
At expiration/settlement:
- If the long holder exercises, they sell bitcoin at the strike price. USD is transferred to the long put holder's LedgerX account at settlement, and bitcoin is transferred to the short put holder's account at settlement.
- If the long holder does not exercise, the option expires worthless. The underlying USD that is Position Locked on the short holder's account is unlocked at 5pm settlement and made Available for Trading in the short holder's account.