Leaving a position

There is one way out, and it is the market#

These options never expire, so nothing tears one up. Leaving is a trade at the front: the best quote on the side you need, at your leg's own strike and decay. The price is the market's now, not a function of what you paid. If nobody stands there the position stays open, with its P/L, and the screen says so rather than reporting a close that did not happen. Partial fills are honest too: what filled, filled.

A taker's close#

You sell at the best bid (or buy back at the best ask) among the makers standing. The position then goes back to the maker who wrote it, the writer of record, and the writer pays or receives that best price itself. The maker who quoted the best price only set the price. So every taker close removes a position from the book: open interest falls whenever a taker closes. You never see a difference; you simply get the best price.

A writer can sit a little off the best quote, so the gap between its own quote and the best is its to bear. That gap is small by construction: no quote outside the corridor can set the front (see Pricing).

A maker's close#

A maker closing passes its obligation to the makers standing at the front, and the trader's side is untouched. The claim changes house; nothing disappears from the trader's side. A maker that has stopped quoting still stands on the trades that reduce what it already wrote, so whoever wrote your position can take it back.

Funding: holding a position#

You never need to trade to hold. What an option holder pays is funding, the cost of the roll described in How it works: the leg's extrinsic at the oracle's relevant side and its own decay, times its rate per year, for the time that passed. The long pays it and the short receives it, one number moved between the two sides, so cash across a leg's two sides sums to zero. Intrinsic is never charged. It shows in PORTFOLIO as FUNDING, and funding alone never liquidates an account.

What a close pays#

An in-the-money option pays its intrinsic in full at every exit; only the time value is at the market's current view. A single option from the OPTION ticket has no second leg, so closing it trades that one leg and pays the result into the account. For a PROTECT or FARM pair, P/L is carried per pair, and the coin reaches your wallet when the account closes.

The close verbs: three#

CLOSE is one position: a perp row, one option pair, one single option, or one maker line. CLOSE ACCOUNT closes every position in one account; the account goes inactive, its curve stops quoting, and its name stays with it for good. CLOSE ALL is wallet-wide: every position in every account. CLOSE and CLOSE ALL touch positions only, so a curve keeps quoting and the account stays alive. On a PROTECT or FARM account the two positions are one structure, so CLOSE ACCOUNT is the only close there is. The same words work whatever the account's kind.