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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

Mainnet SpaceX (SPCX) options expire at 4:00 PM ET on their expiry date. Testnet options currently expire at 08:00 UTC.

At expiry:

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

You cannot trade "right at expiry." Once the contract expiry time 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 the expiry timestamp. It's a 30-minute TWAP.

Parameter
Value
Price source
Hyperliquid Oracle (index price)
TWAP window
30 minutes
Window
30 minutes ending at expiry

The oracle samples price for the 30 minutes ending at expiry 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 WINDOW130 min before expiryTWAP samplingbegins2Expiry timeTrading stopsOrders cancelledState → Expired3Shortly AfterSettlement processedCash credited/debitedPositions removed

What Happens to Your Position​

Step
What Happens
1. Expiry hits
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 contract expiry. Plan to close before if needed.
Using spot price as settlement
Settlement uses 30-min TWAP, not the spot price at expiry.
Holding short ITM without margin buffer
Short ITM positions cost you money at settlement. Ensure sufficient margin.
Forgetting timezone conversion
Mainnet SPCX expires at 4:00 PM ET; testnet currently differs. 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 →

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