Options Contract Specifications
European-style USD-settled options
PowerTrade offers European-style USD-settled options. European-style options can only be exercised at expiry and not before.
Options are priced in USD terms using exchange rates based on a blend of respected price sources.
Non-deliverable BTC Options
Symbol
The symbol of an options contract consists of Underlying asset-Expiry date-Strike price-Option's type (C - call/ P - put). Example: BTC-30MAR2019-10000-C This is a call option (C), with a strike price of 10,000 USD, expiring on March 30, 2019. Note: API traders will see contracts appear in this format, but the symbol rarely if ever appears in the PowerTrade app.
Trading Hours
24/7
Tick Size
0.01 USD
Strike Prices
Strike prices are added and removed at PowerTrade’s discretion. Generally PowerTrade aims to maintain in-, at- and out of the money strike prices with new series being added when the underlying asset price moves significantly or demand is high for particular strikes.
Premium Quotation
Premiums are always quoted in USD to 2 decimal places.
Expiration
0800 UTC on the expiration date.
Exercise Style
European style with USD settlement. In-the-money European style options are exercised at the expiry. This is done automatically and no action from the trader is required.
Payoff Value
Exercise of an options contract will result in a payoff in USD once a final settlement price has been determined, soon after the expiry time. The final settlement price is calculated using EMA-based smoothing over the last 300 seconds of pricing ticks of the index. If the option is “in-the-money”, the payoff value in USD is equal to the difference between the final settlement price and the strike price of the option times the contract size times the quantity held of the option.
Contract Size
Contract size for BTC options is 1 BTC, meaning each contract represents 1 BTC as the underlying.
Initial Margin
The initial margin is calculated as the amount of BTC that will be reserved to open a position. Long call/put: None Short call: Maximum (0.15 - OTM Amount/Underlying Mark Price, 0.1) + Mark Price of the Option Short put : Maximum (Maximum (0.15 - OTM Amount/Underlying Mark Price, 0.1) + Mark Price of the Option, Maintenance Margin)
Maintenance Margin
The maintenance margin is calculated as the amount of BTC that will be reserved to maintain a position. Long call/put: None Short call: 0.075 + Mark Price of the Option Short put: Maximum (0.075, 0.075 * Mark Price of the Option) + Mark Price of the Option
Mark Price
Mark price of an options contract is the current value of the option as calculated by the risk management system. Usually, this is the average of the best bid and best ask price. However, for risk management purposes, there is price bandwidth in place. At any time, the risk management system sets hard limits to the minimum and maximum IV allowed. Example: If the hard limit settings were at 60% minimum IV and 90% maximum IV, then an option with a midprice with IV higher than 90% will be mark priced at 90% IV. Any option with a midprice lower than 60% IV would be priced at 60% IV. Note that 60% and 90% are merely example percentages, and real rates vary and are at the sole discretion of PowerTrade.
Fees
No fees charged at the moment, but this is subject to change
Allowed Trading Bandwidth
Max Price (Buy order) = Mark Price + 0.04 BTC Min Price (Sell order) = Mark Price - 0.04 BTC
Non-deliverable ETH Options
Symbol
The symbol of an options contract consists of Underlying asset-Expiry date-Strike price-Option's type (C - call/ P - put). Example: ETH-31AUG2021-10000-C This is a call option (C), with a strike price of 10,000 USD, expiring on August 31, 2021. Note: API traders will see contracts appear in this format, but the symbol rarely if ever appears in the PowerTrade app.
Trading Hours
24/7
Tick Size
0.01 USD
Strike Prices
Strike prices are added and removed at PowerTrade’s discretion. Generally PowerTrade aims to maintain in-, at- and out of the money strike prices with new series being added when the underlying asset price moves significantly or demand is high for particular strikes.
Premium Quotation
Premiums are always quoted in USD to 2 decimal places.
Expiration
0800 UTC on the expiration date.
Exercise Style
European style with USD settlement. In-the-money European style options are exercised at the expiry. This is done automatically and no action from the trader is required.
Payoff Value
Exercise of an options contract will result in a payoff in USD once a final settlement price has been determined, soon after the expiry time. The final settlement price is calculated using EMA-based smoothing over the last 300 seconds of pricing ticks of the index. If the option is “in-the-money”, the payoff value in USD is equal to the difference between the final settlement price and the strike price of the option times the contract size times the quantity held of the option.
Contract Size
Contract size for ETH options is 1 ETH, meaning each contract represents 1 ETH as the underlying.
Initial Margin
The initial margin is calculated as the amount of ETH that will be reserved to open a position. Long call/put: None Short call: Maximum (0.15 - OTM Amount/Underlying Mark Price, 0.1) + Mark Price of the Option Short put: Maximum (Maximum (0.15 - OTM Amount/Underlying Mark Price, 0.1) + Mark Price of the Option, Maintenance Margin)
Maintenance Margin
The maintenance margin is calculated as the amount of BTC that will be reserved to maintain a position. Long call/put: None Short call:
0.075 + Mark Price of the Option
Short put:
Maximum (0.075, 0.075 * Mark Price of the Option) + Mark Price of the Option
Mark Price
Mark price of an options contract is the current value of the option as calculated by the risk management system. Usually, this is the average of the best bid and best ask price. However, for risk management purposes, there is price bandwidth in place. At any time, the risk management system sets hard limits to the minimum and maximum IV allowed.
Example:
If the hard limit settings were at 60% minimum IV and 90% maximum IV, then an option with a midprice with IV higher than 90% will be mark priced at 90% IV. Any option with a midprice lower than 60% IV would be priced at 60% IV. Note that 60% and 90% are merely example percentages, and real rates vary and are at the sole discretion of PowerTrade.
Fees
No fees charged at the moment, but this is subject to change
Allowed Trading Bandwidth
Max Price (Buy order) = Mark Price + 0.04 ETH Min Price (Sell order) = Mark Price - 0.04 ETH
Still have questions?
Email Support: support@power.trade
Telegram: https://t.me/power_trade
Last updated