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Short-Term Options
Gate.io
Updated at:142 days 9 hours ago

1. What are short term options

Short-term options at Gate.io are European style options that are exercised at expiration only.
All options are exercised automatically when they expire at Gate.io.

The options are USDT-settled, not physically delivered.

For simplicity, one strike price is set for both Put and Call with the same term and expiration time.

Currently, short-term options of 10 minutes, 30 minutes, 1 hour, 4 hours and 1 day are available.

Writing options are not available yet for average users.

2. About Option Contract

Settlement currency: USDT

Multiplier: 0.0001 for BTC-USDT option contract

That is, a contract represents 0.0001 BTC underlying .

Option Price: quoted as USDT amount per BTC.

Underlying Position Value:

underlying’s position BTC value: number of contract X BTC multiplier ( ie.0.0001)

Premium: The cost paid to purchase the options.

Formula: Option Price X Number of contracts X multiplier

Example: If options price is 10 USDT. And you purchase 200 contracts, the premium is :

10 X200 X0.0001=2 usdt.

3.About Price

3.1 Underlying Price

The index price of the underlying contract is the underlying price.

3.2 Strike Price

The strike price is the underlying index price when the option is created.

3.3 Mark Price

The mark price is the reference option price for trading at a given moment.

3.4 Settlement Price

The underlying price at the moment when an option expires.

4. PNL Calculation

4.1) PNL --- Reduced Position

PNL= number of contracts X multiplier X (Exit price- Entry price)

Please note, in the above calculation, trading fee is not considered.

4.2) Profit---- Excised Options

As buyers of options, the minimum profit is zero and the maximum is the different from settlement price and strike price.


Formula:

- CALLnumber of contracts * multiplier * MAX(underlying_price - strike_price, 0)

- PUTnumber of contracts * multiplier * MAX(strike_price - underlying_price, 0)

Please note, in the above calculation, trading fee and premium paid are not considered.

5. Fees

Trading fee is 0.04% of the underlying position value it represents in general, and should not higher than 10% of premium paid.

Formula:

Trading fee: MIN (0.04%*underlying_price,10%*mark_price ) * number of contracts * multiplier

Settlement commission: 0


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