Physically settled contracts means that the underlying asset (in this case Bitcoin) will be delivered upon expiration in exchange for USD. All LedgerX contracts are physically settled.
Buyers receive bitcoin
Sellers receive US dollars
Call buyers that exercise receive bitcoin; and sellers on the other side receive the strike price in cash
Put buyers that exercise receive cash equal to the strike price; and put sellers receive bitcoin
Selling BTC ; receive cash
Buyers of BTC; receive BTC