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Lesson 9: Expiry & Settlement on Hypercall (Platform Reality)

Promise: Know exactly what happens at expiry so you don't get surprised.

Hypercall Settlement Rules​

On Hypercall, options are European-style and cash-settled:

Feature
What It Means
European-style
Exercise only at expiry (not before)
Cash-settled
No asset delivery, cash difference paid
Automatic
No manual exercise required

Expiry Time​

Critical Rule

All Hypercall options expire at 08:00 UTC on their expiry date.

At exactly 08:00 UTC:

  1. New orders are rejected
  2. Open orders are cancelled
  3. Positions enter the settlement process

You cannot trade "right at expiry." Once 08:00 UTC hits, trading stops immediately.

💡

Plan to close positions before expiry if you don't want to go through settlement.

Instrument Lifecycle​

Every instrument progresses through these states:

State
Description
Trading
Active
Normal operation
Enabled
Expired Pending Price
Awaiting settlement price
Disabled
Settled
Settlement complete, positions removed
N/A
ACTIVETrading enabledNormal operationEXPIRED_PENDING_PRICETrading disabledAwaiting TWAP priceSETTLEDPosition removedSettlement complete

Settlement Price: 30-Minute TWAP​

The settlement price is NOT the spot price at 08:00 UTC. It's a 30-minute TWAP.

Parameter
Value
Price source
Hyperliquid Oracle (index price)
TWAP window
30 minutes
Window
07:30 UTC → 08:00 UTC

The oracle samples price from 07:30 UTC to 08:00 UTC and computes the average. This prevents last-minute manipulation.

Key Line

"At expiry, the only thing that matters is intrinsic."

Settlement Value Calculation​

Settlement equals intrinsic value at the TWAP price:

Call Options:

Settlement Value=max⁡(0,S−K)×Q\text{Settlement Value} = \max(0, S - K) \times Q

Put Options:

Settlement Value=max⁡(0,K−S)×Q\text{Settlement Value} = \max(0, K - S) \times Q

Where:

  • SS = Settlement price (30-min TWAP)
  • KK = Strike price
  • QQ = Position size (positive for long, negative for short)

Settlement Examples​

Position
Settlement Price
Intrinsic
Result
Long 2 BTC-100000-C
$105,000
$5,000/contract
+$10,000 credited
Short 2 BTC-100000-C
$105,000
$5,000/contract
-$10,000 debited
Long 1 BTC-100000-P
$105,000
$0 (OTM)
Expires worthless
Long 1 BTC-110000-P
$105,000
$5,000
+$5,000 credited

Settlement Timeline​

Settlement Timeline30-MINUTE TWAP WINDOW107:30 UTCTWAP samplingbegins208:00 UTCTrading stopsOrders cancelledState → Expired3Shortly AfterSettlement processedCash credited/debitedPositions removed

What Happens to Your Position​

Step
What Happens
1. Expiry hits (08:00 UTC)
All open orders cancelled, no new orders accepted
2. Oracle provides TWAP
30-minute average calculated, settlement price established
3. Settlement processed
Intrinsic value computed, cash credited/debited
4. Position removed
Position disappears from portfolio, WebSocket confirms

Common Mistakes​

Mistake
Correction
Thinking you can trade at expiry
Trading stops exactly at 08:00 UTC. Plan to close before if needed.
Using spot price as settlement
Settlement uses 30-min TWAP, not the spot price at 08:00.
Holding short ITM without margin buffer
Short ITM positions cost you money at settlement. Ensure sufficient margin.
Forgetting timezone conversion
08:00 UTC may be a different time in your timezone. Double-check.

Test your understanding before moving on.

Q: What exact time do Hypercall options expire?
Q: What price is used for settlement?
Q: What happens to open orders at expiry?

💡 Tip: Try answering each question yourself before revealing the answer.

See Also​

Navigation: ← Lesson 8: Execution on Orderbook | Lesson 10: Margining Basics →