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))

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