> 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/options-metrics-guide.md). # Options Metrics Guide This guide explains the main options metrics on Rails and how they are calculated. Explore them below:
Definitions/pages/sWbZHQU8UthIBBab35kM#definitions
General Calculations/pages/sWbZHQU8UthIBBab35kM#general
Margin Calculations/pages/sWbZHQU8UthIBBab35kM#margin
Pricing, Fees & Settlement Calculations/pages/sWbZHQU8UthIBBab35kM#pricing-fees-and-settlement
{% hint style="info" %} See [Black-76 & the Greeks](/trading/options/black-76-and-the-greeks.md) for pricing inputs and [Margin & Liquidation](/trading/options/margin-and-liquidation.md) for liquidation mechanics. {% endhint %} ## Definitions
SymbolMeaning
FForward price: the underlying reference price used to value the option.

On Rails, F = P_{index}
KStrike price: the price at which the option settles at expiry.
P

Price, where:

  • P_{index} is the Index Price, or current fair-market price of the underlying asset. It is used in margin calculations.
  • P_{call} is the call model price from Black-76, before the intrinsic floor.
  • P_{put} is the put model price from Black-76, before the intrinsic floor.
  • P_{mark} is the Mark Price.
QContracts: the number of option contracts in the position.
S

Side: direction of the position, where:

  • Long = 1
  • Short = -1
TTime to expiry: the remaining life of the option, expressed in years.
p

Premium: the per-contract amount paid by the buyer or received by the seller.

  • p_{paid} is the Premium Paid.
  • p_{rcvd} is the Premium Received.
M

Margin, where:

  • IM is Initial Margin, or collateral required to open or maintain a short option position.
  • MM is Maintenance Margin, or the minimum collateral required to avoid liquidation on a short option position.
  • M_{used} is Used Margin, or collateral locked to cover open orders and positions.
DDeposits: Amount of USDT deposited into your account.

Note: Transferring cash balances from Perps to Options Account are considered a deposit.
W​Withdrawals: Total USDT withdrawal volume.

Note: Transferring cash balances from Options to Perps are considered a withdrawal.
P\&L​

Profit & Loss: the USDT profit or loss relative to entry and position size, where:

  • P\&L_u​ = Unrealized P&L
  • P\&L_r​​ = Realized P&L
Fee​

Fees: Total fees charged in USDT, where:

  • Fee_{del} is the Delivery Fee (only at expiry)
  • Fee_{txn} is the Transaction Fee (except at expiry)
POPayoff: the USDT amount settled at expiry, equal to the option's intrinsic value if in-the-money and zero otherwise. The seller pays the payoff to the buyer at settlement.
## Calculations ### General
Total Balance Total Balance is the settled cash value of your account. It reflects completed events, but does not include unrealized P\&L from open positions: $$\text{Total Balance} = D\_{total} + p\_{total} + PO -W\_{total} -Fees\_{total}$$
Available Balance **Available Balance:** funds available for new trades or withdrawals. $$\text{Available Balance} = \text{Total Balance} - M\_{used}$$
Account Balance Your **Account Balance** is your total cash (collateral), and is equivalent to your Total Balance when you have no positions open. $$\text {Account Balance} = \text{Available Balance} + M\_{used}$$
Account Equity Account Equity is the real-time value of the account, combining settled cash with the current mark-to-market value of all open positions: $$\text{Account Equity} = \text{Total Balance} + \sum\_{i} \left( P\_{mark,i} \times (Q\_i \times S\_{i} \right)$$ where: * $$\sum\_{i} \left( P\_{mark,i} \times Q\_i \right)$$ is the combined mark-to-market value of all open positions, using each position's Mark Price ($$P\_{mark,i}$$) and quantity For short positions, the position mark value is negative, so Account Equity can be above or below Total Balance depending on how open positions are marked.
### Margin
Margin Ratio Margin Ratio measures how close a short position account is to liquidation. It is the account's total maintenance requirement relative to its equity. $$\text{Margin Ratio} = \frac{MM\_{total}}{\text{Account Equity}}$$ where: * $$MM\_{total} = \sum\_{i} MM\_i$$ * Note: the sum of the Maintenance Margin for each open position ($$i$$) (see [Maintenance Margin (Short Call/Put)](#maintenance-margin-short-call-put)). * $$\text{Account Equity} = \text{Total Balance} + \text{Positions Mark Value}$$ A higher Margin Ratio indicates greater liquidation risk; liquidation is triggered when the ratio reaches 100%.
Margin (Long Call/Put) For **long calls or puts**, the maximum loss is the premium paid for the contract and adds a buffer rate of 16.5%, therefore:\ \ Required initial margin is calculated: $$IM = (p \times 1.165) \times Q$$ Once the premium is paid upon fills, the maintenance margin required becomes: $$MM = (p \times 0.165) \times Q$$ {% hint style="info" %} The 16.5% **buffer rate** covers a 12.5% liquidation fee, 1% insurance fee, and 3% slippage. {% endhint %}
Initial Margin (Short Call/Put) For **short calls or short puts**, potential losses can be large. Short calls have no upside loss ceiling, and short puts can still lose significantly if the underlying falls to zero. Therefore, margin is the greater of $$IM'$$ and Maintenance Margin: $$M = \max(IM',\ MM)$$ Where: $$IM' = \max!\left(0.15 \times P\_{index} - \text{OTM Discount},\ 0.10 \times P\_{mark}\right) \times Q$$ {% hint style="info" %} This uses 15% index-based risk, with a 10% mark-price floor, plus mark price. It also ensures Initial Margin never falls below Maintenance Margin. {% endhint %}
Maintenance Margin (Short Call/Put) In Short Calls or Short Puts, Maintenance Margin is used for [liquidation monitoring](/trading/options/margin-and-liquidation.md): $$MM = \max!\left(0.05 \times P\_{index} - \text{OTM Discount},\ 0.05 \times P\_{mark}\right) \times Q$$ {% hint style="info" %} This uses 5% index-based risk, or 5% mark-price floor. {% endhint %}
Mark Price Floor (Calls & Puts) Rails prices options using [Black-76](/trading/options/black-76-and-the-greeks.md) and applies an intrinsic value floor to prevent a mark price below [intrinsic value](#intrinsic-value). **For calls:** $$P\_{mark} = \max!\left(P\_{call},\ \max(F - K,0)\right)$$ **For puts:** $$P\_{mark}= \max!\left(P\_{put},\ \max(K - F,0)\right)$$
OTM Discount (Short Calls/Puts) For **short calls,** the OTM discount reduces short-call margin when the call is out of the money: * $$\text{OTM Discount} = \max(0,\ K - P\_{index})$$ For short puts, the OTM discount reduces short-put margin when the put is out of the money: * $$\text{OTM Discount} = \max(0,\ P\_{index} - K)$$
Position Mark Value Positions Mark Value is the mark-to-market value of all open positions: $$\text{Positions Mark Value} = \sum\_{i} \left( P\_{mark,i} \times Q\_i \right)$$
### Pricing, Fees & Settlement
Premium Option premiums are calculated using the Black-76 formula. Given the complexity, the formula and details are explained in our article on [Black-76 and the Greeks](/trading/options/black-76-and-the-greeks.md).
Intrinsic Value Intrinsic value is the option's immediate exercise value — what it would be worth if exercised right now. **For calls:** $$\text{Intrinsic Value} = \max(F - K,\ 0)$$ **For puts:** $$\text{Intrinsic Value}= \max(K - F,\ 0)$$
Payoff At settlement, if the contract is ITM, the contract seller pays the [intrinsic value](/trading/options/options-metrics-guide.md#intrinsic-value) to the buyer, else the contract expires worthless. **For calls:** $$PO = Q \times \max(F - K,\ 0)$$ **For puts:** $$PO = Q \times \max(K - F,\ 0)$$
Transaction Fee The transaction fee applied to each options trade (other than at expiry) is calculated as: $$Fee\_{txn} = min(0.0003 × P\_{index}, 0.125 × p) × Q$$ The 12.5% cap on the option price prevents the fee from ever exceeding a fair proportion of the premium. Deep out-of-the-money contracts can have a premium close to zero, so charging on the index price alone would be disproportionate; the MIN function ensures the fee stays reasonable relative to the premium.
Delivery Fee Options that are held through to expiry are settled with a delivery fee, calculated as: $$Fee\_{del} = (0.00015 × P\_{index}) × Q$$
Settlement P&L These formulas show payoff at expiry, before fees: * **Long call:** $$P\&L = \max(F - K,0) - p\_{paid}$$ * **Long put:** $$P\&L = \max(K - F,0) - p\_{paid}$$ * **Short call:** $$P\&L = p\_{rcvd} - \max(F - K,0)$$ * **Short put:** $$P\&L = p\_{rcvd} - \max(K - F,0)$$