Guide to Options Expiration Day

Expiration is the last day that the option contract is valid. On or before the expiration date, market participants must decide what to do with their expiring position.

  • Options expire at 4 pm EST on the expiration date. Settlement runs at 5 pm EST.
  • Options on LedgerX are European-style, meaning the buyer can only exercise the option at expiration.
  • LedgerX Options 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.
  • LedgerX does not automatically exercise in the money options.
  • There is a long holder & short holder in every position. Each holder has the option to do the following as described below.

Long Holder

Before an option expires, option owners who are long (buyer) can choose to…

  1. Exercise the option - The option buyer has until 5 pm EST on expiration to submit exercise instructions on the platform under Balances & History > Exercise Instructions*
  2. Close their position to realize their profit or loss - see steps to Sell to Close a Long position
  3. Let the contract expire worthless - see what happens if I don't exercise my long options

*If sufficient collateral is not on deposit at LedgerX, the exercise instructions will not be accepted. There is no auto-exercise. To submit exercise instructions

  • Long Calls need USD = (Strike Price X # of contracts) on the platform 
  • Long Puts need BTC/ETH on the platform

Short Seller

Before an option expires, option owners who are short (seller) can choose to…

  1. Take no action and possibly be assigned on the contracts
  2. Close their position to realize their profit or loss -see steps to Buy to Close a Short Position
  3. If you do not close the position, the options will either expire worthless or if in the money, you would possibly be assigned on the contracts.  

Note: You are not required to post short collateral when selling to close a position.

Open Positions

The positions tab on the dashboard shows your current positions > the position history shows both current and expired positions. 

Post Settlement

Expired Positions will be displayed under Balances and History>Position History

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