# Expiry and Settlement

### Expiry Time

* All options on ClickOptions **expire at 08:00 UTC** on their maturity date.
* Available expiries: **Daily, Weekly, Monthly, Quarterly**.
* Once expired, contracts are **automatically settled** and results recorded in *Exercise History*.

### Settlement Price Calculation

The **Settlement Price** is based on the **time-weighted average price (TWAP)** of the proprietary Index Price during the last **30 minutes before expiry (07:30–08:00 UTC)**.

#### Formula:

$$
SettlementPrice = \frac{\sum (IndexPrice\_t \times Weight\_t)}{\sum Weight\_t}
$$

Where:

* IndexPricetIndexPrice\_tIndexPricet​ = Index Price at time *t*
* WeighttWeight\_tWeightt​ = Assigned weight for observation *t*

This ensures the final settlement price is robust against **short-term volatility and price manipulation**.

### ITM vs OTM Outcomes

* **In-the-Money (ITM):**\
  The option has positive intrinsic value at expiry.

  * **Call Option:**

  $$
  IntrinsicValue = \max(IndexPrice\_{settlement} - Strike, ; 0) \times ContractSize
  $$

  * **Put Option:**

  $$
  IntrinsicValue = \max(Strike - IndexPrice\_{settlement}, ; 0) \times ContractSize
  $$
* **Out-of-the-Money (OTM):**\
  The option expires worthless → no payout.

### Exercise Fee

* **Applied only to ITM options** at expiry.
* **Exercise rate**: **0.01%**
* **Exemption:** If the option was opened and expired on the **same day**, no exercise fee applies.

#### Formula:

$$
\text{Exercise Fee}
===================

\min\left(
\text{Exercise Fee Rate} \times \text{Settlement Price} \times \text{Contract Size},
\ 10% \times \text{Option Value}
\right)
\times \text{Position Size}
$$

### Example – BTC Call Expiry

* **Strike:** 100,000 USDT
* **Settlement Price:** 105,000 USDT
* **Contract Size:** 0.01 BTC
* **Position size:** 10 contracts 
* **Premium Paid:** 150 USDT
* **Exercise Fee Rate:** 0.01%

#### Option value: 

$$
\text{Option Value}
===================

# 105{,}000 - 100{,}000

5{,}000\times 0.01 \times 10 = 500
$$

#### Exercise fee:

$$
\text{Exercise Fee}
===================

\min\left(
0.01% \times 105{,}000 \times 0.01,
\ 10% \times 500 \times 0.01
\right)
\times 10
$$

ExerciseFee = 0.11 USDT

Profit=500−150−0.11= 349.89  USDT


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