Maturity Settlement

Settlement Rules

By default, all Regular and Custom Contracts are Auto-Exercised at Maturity if and only if the contract has exercisable intrinsic value. All contract ‘cash settled’ in the sense that no party, long or short holder has to provide any additional funds during settlement. All settlement pay-outs to both long and short holders of contracts are being made from locked-up collateral amounts.

It is important to note that due to Elektro's collateral optimization mechanism, the currency of the locked-up collateral amount can be either the underlying currency or the premium currency of the underlying market and the pay-outs to long and short holders during the settlement process could happen in either currency without the information being available prior to the expiry. Participants however will be able to specify their preference settlement currency and will be able to enter into spot transactions to exchange the settlement currency into their preferred currency should they be different.

Contracts cannot be early exercised.

Contracts cannot be exercised if they do not have exercisable intrinsic value at Maturity.

Contracts with exercisable intrinsic value at Maturity must be auto-exercised.

All Contracts are being Auto-Exercised. If a contract has no exercisable intrinsic value, the Final Settlement Amount is 0.

Calculation of the Settlement Amount

If a contract has exercisable intrinsic value, the calculation of the Final Settlement Amount follows the below set steps:

Step 1 - Calculation of the Intrinsic Value

Step 2 - Calculation of Scaled Intrinsic Value

The Scaled Intrinsic Value is calculated by multiplying the Intrinsic Value with the Contract Size and the Multiplier of the Contract.

Step 3 - Calculation of the Contract Settlement Amount

Contracts that have a different Settlement Contract than the Strike Contract require a conversion of the Scaled Intrinsic Value from the Strike Contract into the Settlement Contract using the Settlement Reference Price.

For Contract that have the same Settlement and strike Contract, the Contract Settlement Amount is equal to the Scaled Intrinsic Value.

Step 4 – Calculation of the Final Settlement Amount

The Final Settlement Amount is calculated by multiplying the Contract Settlement Amount with the quantity of the position of the Option Contract holder