Introduction to Simple Options
I. Introduction
OKX Simple Options is a European-style options product that supports four trading directions: buying calls, buying puts, selling calls, and selling puts. At launch, it supports options on tokenised stocks, with plans to expand to crypto options.As a buyer, you can buy calls or puts to gain leveraged exposure to rises or falls in the price of the underlying asset with less upfront capital, while limiting your maximum loss to the premium paid. You can also buy puts to hedge against downside risk in your existing holdings of the underlying asset.As a seller, you can sell calls to earn premium income from existing holdings, provided that you hold the underlying asset and are willing to sell it at the agreed price. You can also sell puts to receive a premium, provided that you are willing to buy the underlying asset at the agreed price. In return for receiving the premium, sellers must fulfil their contractual obligations if the assignment conditions are met at expiry.Simple Options uses an over-the-counter request-for-quote (OTC RFQ) trading model. You can select a contract through the Simple Options chain, obtain a valid quote, and confirm the trade. After opening a position, you can increase it, close it partially or in full before expiry, or hold it until expiry for automatic processing under the contract rules.Availability of Simple Options and underlyings varies by region, and Simple Options are not available to U.S.
II. What Are Options?
An option is a contract that gives the buyer a right, but not an obligation. By paying a premium, the buyer obtains the right to buy or sell the underlying asset at an agreed price at a specified time. The seller receives the premium and assumes the corresponding contractual obligation when the conditions specified in the contract are met.
1. Call Options and Put Options
Option type | Right granted to the buyer |
|---|---|
Call option | The right to buy the underlying asset at an agreed price |
Put option | The right to sell the underlying asset at an agreed price |
Calls and puts are the two basic types of options. Both can be bought or sold. The buyer obtains the right, while the seller assumes the corresponding obligation.
2. Key Elements of an Option
Element | Description |
|---|---|
Underlying asset | The asset on which the option contract is based |
Strike price | The price specified in the contract at which the underlying asset may be bought or sold |
Premium | The price of the option, paid by the buyer and received by the seller |
Expiry date | The date and time when the option contract expires |
Exercise style | Determines when the option may be exercised. European-style options may be exercised only at expiry, while American-style options may be exercised before expiry. |
Together, these elements define the basic terms of an option contract.
III. Contract Specifications
Item | Description |
|---|---|
Supported underlyings | Options on tokenised stocks are supported at launch, with plans to expand to crypto options. Refer to the contracts available on the trading page. |
Trading directions | Buy calls, buy puts, sell calls, and sell puts |
Contract type | European-style options. Early exercise and early assignment are not supported. |
Trading model | OTC RFQ, with trades confirmed against valid quotes |
Trading hours | Quote requests and trading are available 24/7. For contracts approaching expiry, opening, increasing, and closing positions stop 30 seconds before settlement. |
Minimum trade size | 0.01 contract, corresponding to 1 unit of unified tokenized stock |
Standard contract multiplier | 100 for tokenised stock options, meaning 1 contract corresponds to 100 tokenised shares |
Premium and cash settlement currency | USDT |
Settlement time at expiry | 16:00 Hong Kong time (UTC+8) on the expiry date |
Trading fees | All-in pricing, with no additional trading fees. The quoted premium already includes a spread retained by OKX and its affiliates. |
Corporate actions, such as stock splits and reverse stock splits, may result in adjustments to the strike price, contract multiplier, or deliverable assets. Refer to the contract information and relevant announcements for details.
IV. Trading Simple Options
1. Trading Directions
The buyer’s maximum loss is limited to the premium paid. The seller receives a premium, must provide sufficient collateral to fully cover the obligation, and must fulfil the contract if the assignment conditions are met at expiry. Receiving a premium does not guarantee that the trade will be profitable.
2. Quotes and Fees
The indicative premium displayed in the Simple Options chain helps you browse and compare contracts. The actual trade price is determined by the valid quote you confirm. When you open the order panel, the system requests a quote based on your selected contract, trading direction, and quantity, and displays the quote and the estimated premium payable or receivable.Quotes are valid for a limited time. If a quote expires, you must refresh it and confirm the updated quote. The system will not automatically execute your trade at a new price.All trades use all-in pricing. The premium is the price of the option, which already includes a spread retained by OKX and its affiliates.The final amount payable or receivable is displayed when you confirm the trade, with no additional commissions, platform fees, clearing fees, or trading-related third-party charges.
3. Opening and Increasing Positions
On the Simple Options page, select the underlying asset, trading direction, option type, expiry date, and strike price, then select the contract to open the order panel. Enter the quantity, review the quote, premium, and required assets, and confirm the trade.Multiple opening trades in the same contract and direction are consolidated into a single position, with the entry price calculated on a weighted-average basis. Positions in different contracts are displayed and managed separately. When increasing a position, buyers must pay the premium for the additional quantity, while sellers must provide the corresponding additional margin.Only one position direction is supported for each contract. If you already hold a position, a trade in the opposite direction reduces or closes that position. To reverse your position direction, first close the existing position in full, then place a new trade in the opposite direction. The quantity you close cannot exceed the quantity currently available to close.
V. Options Margin and Position Risk
1. Margin Management and Account Segregation
Simple Options buyers pay the premium in full when opening a position, while sellers provide sufficient collateral to fully cover their contractual obligations. While the position remains open, no additional maintenance margin is required as a result of changes in the underlying asset’s price, and the position will not be forcibly liquidated due to insufficient margin.Simple Options positions and collateral are managed in a separate options account and do not share margin or position risk with the main trading account.Account segregation and full collateralisation do not eliminate investment risk. Buyers may lose the entire premium paid. Sellers must still fulfil their obligations at the strike price if the assignment conditions are met at expiry. A put seller must buy the underlying asset at the strike price if assigned, even if the settlement price is substantially lower. A call seller must sell the corresponding underlying asset at the strike price if assigned, even if the settlement price is substantially higher.
2. Seller Margin Requirements
Sellers use a fully funded model and must provide margin as set out below when opening a position. When increasing a position, sellers must provide the corresponding margin for the additional quantity.
Trading direction | Margin asset | Margin requirement |
|---|---|---|
Sell a put | USDT | Amount locked = Strike price × Contract quantity × Contract multiplier |
Sell a call | Underlying asset | Quantity locked = Contract quantity × Contract multiplier |
These requirements apply to the collateral provided for the seller’s position.
VI. Closing Positions Before Expiry
1. Do I Have to Hold My Position Until Expiry?
No. Simple Options supports partial or full closing before expiry. You can initiate a closing trade from your open position, obtain a valid quote, and confirm the trade.After a partial close, the remaining position stays open. You can close it later or hold it until expiry. For contracts approaching expiry, opening, increasing, and closing positions stop 30 seconds before settlement.
2. How Are Different Positions Closed?
Position type | Closing action | Treatment of funds or assets |
|---|---|---|
Long call position | Sell to close | Receive the premium in USDT based on the closing quote. |
Long put position | Sell to close | Receive the premium in USDT based on the closing quote. |
Short call position | Buy to close | Pay the premium required to close using USDT or by converting pledged underlying assets. After closing, any unused margin attributable to the closed portion is returned to the trading account. |
Short put position | Buy to close | By default, the closing premium is deducted from the USDT margin for the contracts you close. The remaining margin is returned to the trading account. |
Buyers receive a premium by selling to close, while sellers pay a premium by buying to close. Once the closing trade is completed, the corresponding position is reduced or closed, and unused margin is released in accordance with the applicable rules.For short call positions, underlying-asset conversion is the default closing payment method. The premium required to close is still quoted in USDT. The page displays the estimated quantities of underlying assets to be used and released after conversion. The conversion price may differ from the spot price shown on the page; refer to the price displayed for your closing transaction.
3. How Is Realised P&L Calculated When Closing Before Expiry?
Realised profit and loss (P&L) can be calculated using the difference between the option’s closing price and its average entry price:
Position direction | Realised P&L (USDT) |
|---|---|
Long position | (Closing price − Average entry price) × Quantity closed × Contract multiplier |
Short position | (Average entry price − Closing price) × Quantity closed × Contract multiplier |
Here, the closing price and average entry price both refer to the option premium price per unit of the underlying asset, not the price of the underlying asset itself. The average entry price is the weighted-average opening price of the position.For a partial close, realised P&L is calculated only for the quantity closed. The average entry price of the remaining position stays unchanged.For short call positions, even when the premium is paid through underlying-asset conversion, P&L is calculated using the price difference above and expressed in USDT. This figure reflects the P&L of the option trade, not the overall P&L of your existing underlying asset holdings.
VII. Settlement at Expiry
1. Settlement Time and Settlement Price
Simple Options enters settlement at 16:00 Hong Kong time (UTC+8) on the expiry date. The final settlement price is the average underlying index price between 15:30 and 16:00 on that day, rather than the latest traded price at the exact moment of expiry. The index is expressed in USD and converted into USDT for settlement. This window falls outside the U.S. exchange trading hours, so the settlement price may differ from the price of the underlying stock on its primary exchange.Only the remaining open quantity is processed at expiry. Fully closed positions do not participate in settlement. After a partial close, the remaining position continues to be processed under the original contract rules.
2. Buyers: USDT Cash Settlement
Calls or puts held by buyers until expiry are processed automatically based on the final settlement price. Buyers do not need to receive or deliver the underlying asset.
Position type | Automatic exercise condition | Cash settlement amount |
|---|---|---|
Long call position | Settlement price ≥ Strike price | (Settlement price − Strike price) × Remaining contract quantity × Contract multiplier |
Long put position | Settlement price ≤ Strike price | (Strike price − Settlement price) × Remaining contract quantity × Contract multiplier |
If the relevant condition is not met, the option expires worthless and the settlement amount is 0. The premium paid when opening the position is not refunded and is not deducted again at expiry.The cash settlement amount at expiry is not the same as net profit. To calculate net P&L at expiry, deduct the opening premium attributable to the remaining position. Once settlement is completed, any cash settlement amount due is automatically credited to the trading account.
3. Sellers: Physical Settlement
If the assignment conditions are met at expiry, the seller settles the underlying asset and USDT at the strike price.
Position type | Automatic assignment condition | Settlement treatment |
|---|---|---|
Short call position | Settlement price ≥ Strike price | Deliver the pledged underlying assets corresponding to the remaining contracts and receive USDT at the strike price. |
Short put position | Settlement price ≤ Strike price | Use the pledged USDT to buy the underlying assets corresponding to the remaining contracts at the strike price. |
The quantity of underlying assets and the purchase or sale amount are calculated as follows:
Underlying asset quantity = Remaining contract quantity × Contract multiplier Purchase or sale amount = Strike price × Remaining contract quantity × Contract multiplier
The underlying assets or USDT received through settlement are credited to the trading account. If the assignment conditions are not met, the option expires and the remaining margin for the position is unlocked and returned. The premium received by the seller when opening the position is not credited again at expiry.If the final settlement price is exactly equal to the strike price, automatic exercise or assignment still applies. The buyer’s cash settlement amount is 0, while the seller must still complete the corresponding exchange of USDT and the underlying asset at the strike price.
VIII. Special Circumstances and Important Notes
1. Corporate Actions May Affect Contracts
Stock splits, reverse stock splits, mergers, acquisitions, and other corporate actions may result in adjustments to the strike price, contract multiplier, or deliverable assets. While a corporate action is being processed, new position openings may be restricted or quotes may be suspended. Collateral pledged for existing short call positions must also be handled in accordance with the adjusted delivery requirements.
2. Settlement Exceptions May Extend Processing Time
If the final settlement price has not yet been determined, or the relevant asset delivery has not been completed, positions and collateral will remain locked pending settlement. Once settlement is completed, the position status will be updated and the applicable funds or assets will be returned.