Settlement takes place daily at 8:00 UTC. On settlement, unsettled PNL is booked to your account in the settlement coin (USDt). Unsettled PNL is the profit and loss denominated in USD of your open and closed positions since the last settlement (i.e. at 8:00 UTC on the previous day), updated in real-time. There is no physical delivery of the underlying.
Final settlement occurs at the expiration of a contract. Expiring contracts incur a 1 bps final settlement fee. The final settlement price is determined by the Exchange Delivery Settlement Price (EDSP), which is a time-weighted average index between 07:30 and 08:00 UTC on the day of expiration.
Options traded on Thalex have a futures-style daily settlement at the mark price. This means that if, for example, you buy a BTC call option, the premium of the option is not immediately deducted from your asset balance. Instead, the premium is reflected in your unsettled PNL.
IMPORTANT: As unsettled PNL is settled in the settlement coin (USDt), you are required to maintain sufficient USDt in your account at all times to avoid negative USDt balances after settlement.