Options Overview

What is an Option:

An option is a contact between a buyer and a seller where the buyer of the contract has the right, but not the obligation, to transact in Bitcoin at a specific Strike price on a specific date (Expiration). The contract size on LedgerX is 1 Bitcoin.

What is the Strike Price: The strike price of an options contract is the price at which the options contract can be exercised.

If you’re buying a call, your call is profitable if the value of Bitcoin goes above the strike price (plus whatever premium you paid). If the value of Bitcoin stays below your strike price, your call option contract will expire worthless. The reverse is true for put options. Both call and put options will be explained in greater detail below.

What is the Expiration Date: The last date on which an option can be traded. The expiration date on LedgerX is 16:00 EST and our contracts are European Style meaning they can only be exercised on the date of expiration.

What Happens at Options Expiration: At 16:00 EST the options contracts will expire and no longer be available for trading. LedgerX affects settlement on the day of expiration at 17:00 EST. Settlement is when the buyer must make payment to the seller while the seller delivers the assets to the buyer. Our contracts are physically settled so in the case of a call option if the buyer exercises their position they will receive Bitcoin and if the buyer of a put option exercises their position they will sell Bitcoin.