Exercise, Expiry, and Settlement of Options
Learn what happens when options expire, how to exercise contracts early, and how settlement works on Midas.
Understand Exercise Types
Midas supports both European-style and American-style options. European options can only be exercised at expiration. American options can be exercised at any time before expiration, giving you more flexibility. The option type is displayed on the contract details.
Automatic Exercise at Expiration
Options that are in-the-money at expiration are automatically exercised by the Midas system. If your call option has a strike price below the settlement price, or your put has a strike above it, the intrinsic value is credited to your account. Out-of-the-money options expire worthless with no action needed.
Manual Early Exercise
For American-style options, you can exercise early by navigating to Options > Positions > select the position > Exercise. Early exercise is typically only advantageous in specific situations, such as capturing a dividend or locking in deep-in-the-money value when time value has eroded significantly.
Settlement Process
Midas options are cash-settled, meaning no actual delivery of the underlying asset occurs. Upon exercise or expiration, the profit (intrinsic value) is calculated and credited to your Options account in USDT. Settlement is processed immediately with no delay.
Manage Positions Before Expiry
You can close your options position at any time before expiration by placing an opposite order on the same contract. This is often preferable to waiting for expiration because it allows you to capture remaining time value. Most active traders close positions before expiry rather than exercising.