10. How does the final settlement of DBOE Options work?

DBOE provides weekly options that expire every Friday. At expiry:

• A DBOE call option is defined as a bull call spread.

  • Call final payout = min(condK - K, max(0, underlying fixing - K))

• A DBOE put option is defined as a bear put spread.

  • Put final payout = min(K - condK, max(0, K - underlying fixing))