> For the complete documentation index, see [llms.txt](https://help.rails.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.rails.xyz/trading/options/expiry-and-settlement.md).

# Expiry & Settlement

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#### New to Options?

If you have never traded options before, we recommend starting with our [Intro to Options](/trading/options/intro-to-options.md) article before proceeding through this section.
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Options on Rails settle automatically at expiry using a published mark price. Weekly and monthly contracts settle automatically at 08:00 UTC on their expiry date. Rails options are [cash-settled](/trading/options/intro-to-options.md#what-is-an-option), so settlement does not require delivery of the underlying asset. Instead, the final contract value is applied as cash P\&L.

### Contract Expiry

At the contract’s expiry time, Rails evaluates each option against the published mark price and applies the settlement outcome automatically:

* [**In-the-money**](/trading/options/intro-to-options.md#intrinsic-value-time-value-and-moneyness) contracts pay out their intrinsic value automatically — a call pays the settlement price minus the strike, and a put pays the strike minus the settlement price.
* [**Out-of-the-money**](/trading/options/intro-to-options.md#intrinsic-value-time-value-and-moneyness) contracts expire worthless.

If a contract finishes in the money, Rails credits or debits the resulting cash-settled P\&L to the account as part of the settlement process.

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You **do not need to manually exercise** eligible contracts.
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### Settlement

Settlement is processed as a single account update that includes:

* exercise P\&L
* premium reconciliation
* fees
* margin release

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Settlement uses the underlying's settlement price at expiry (08:00 UTC), not the mark price or the last traded price.
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Rails applies these changes together as one transaction. This keeps settlement consistent and avoids partial account updates.

After settlement, expired contracts close automatically, released margin returns to your available collateral, and any final P\&L is reflected in your account balance.