Change To Inverse Option Delivery Process

Back in April 2026 the delivery process for the linear (USDC settled) options was changed such that they are first physically settled into a futures contract, which itself then settles into cash upon expiration. The details of that announcement can be viewed here.

From 1st August 2026 this change will also be made to inverse (coin settled) options. In terms of the profit/loss of option positions, and what is paid or received on expiry, there is no difference between the two methods. Some traders will benefit from lower settlement fees on the futures though.

So the net financial result of the change will be a trader will either see no change, or they will be slightly better off by saving on delivery fees.

What is changing?

Here’s a summary of the key updates to the expiry and settlement process:

• At the moment of expiry, there will be an extra step in the transaction log for any options that expire in the money (ITM). There will be an entry that first physically settles the ITM option into the relevant futures contract, and then a delivery entry for the future.
• Any positions on the relevant future will net off just before expiry, which can result in lower delivery fees for the future. If there is any offsetting, the total delivery fees will be lower with the new delivery process. If there is no offsetting, the total delivery fees will be the same as before.
• All option expiries will have a corresponding future for their entire lifecycle.

What is not changing?

Here’s what remains the same throughout the transition:

• The settlement currency for all instruments remains the same.
• The futures settle on the exact same 30 minute TWAP of the index leading into expiry, so the profit/loss of an option position will be exactly the same.
• A delivery fee is still paid on an expiring ITM option, prior to any position netting on the future.
• Although the options will now physically settle into futures, these futures will then settle into cash shortly thereafter in the same way as the options used to, so from the trader’s perspective the options can still be thought of as cash settled.

Delivery fees explained

The usual delivery fee will still apply to an option expiring ITM at the moment it is physically settled into futures. A futures position generated by the physical settlement of the ITM option will not pay an additional delivery fee though, so there is no double payment of delivery fees for the same position.

The futures position generated by the physical settlement of an option can however offset any existing position on the future before the delivery fee for the future is calculated. So if the physical settlement of the option results in a smaller futures position size, this will result in a smaller delivery fee being paid on the future. If the physical settlement of the option results in the futures position flipping to the opposite direction, there will be no delivery fee to pay for the future.

What will happen in the transaction log?

When an option expires OTM (out of the money), the value in the Type column will be changing to “expiry”. As there is nothing to settle into futures when an option expires OTM, this will remain the only entry in the transaction log.

When an option expires ITM, there is currently a single delivery entry in the transaction log. This entry (cash) settles any intrinsic value of the option into the cash balance.

With the new process, there will be an additional entry, resulting in:

1. An entry to physically settle the option into the futures contract, with an entry price of the strike price of the option, and a position size calculated as: position_size_future = position_size_option * strike
2. The delivery entry for the futures contract. This entry (cash) settles any profit from the futures into the cash balance.

The currency that any payments are made in, as well as the total profit after delivery, will be the same with both methods.

Example 1

A trader is long one BTC call option with a strike price of $100,000. At expiry the expiration price is $125,000. How is this handled in the transaction log?

Old method:

A delivery entry for the option will settle the intrinsic value of the option into the cash balance. As it’s an inverse option, the settlement currency is BTC, and the amount is therefore calculated as:

position_size * (index – strike) / index
= 1 * (125,000 – 100,000) / 125,000
= 0.2 BTC

New method:

First, an entry will physically settle the option into a futures contract. In this example, one BTC worth of BTC futures will be purchased with an entry price of $100,000 (the strike price of the call option). As these are inverse futures, the position size is in USD, so 100,000 USD in this example.

Next, a delivery entry for the futures contract will settle the profit from the futures contract into the cash balance. This profit is calculated as:

position_size * (1/entry – 1/exit)
= 100,000 * ((1 / 100,000) – (1 / 125,000)
= 100,000 * 0.000002
= 0.2 BTC

In both instances, the cash balance increases by 0.2 BTC. As there was no pre-existing futures position to offset with, the total delivery fees paid is also the same.

As you can see, the new method is economically equivalent to the old method in terms of the PNL of the position. The only difference in total PNL that can occur with the new method is a reduction in the delivery fees of the future if there is an offsetting futures position.

Example 2

A trader is long one BTC put option with a strike price of $100,000. At expiry the expiration price is $80,000. How is this handled in the transaction log?

Old method:

A delivery entry for the option will settle the intrinsic value of the option into the cash balance. As it’s an inverse option, the settlement currency is BTC, and the amount is therefore calculated as:

position_size * (strike – index) / index
= 1 * (100,000 – 80,000) / 80,000
= 0.25 BTC

New method:

First, an entry will physically settle the option into a futures contract. In this example, one BTC worth of BTC futures will be sold with an entry price of $100,000 (the strike price of the put option). As these are inverse futures, the position size is in USD and we are short, so the position size is -100,000 USD in this example.

Next, a delivery entry for the futures contract will settle the profit from the futures contract into the cash balance. This profit is calculated as:

position_size * (1/entry – 1/exit)
= -100,000 * ((1 / 100,000) – (1 / 80,000)
= -100,000 * -0.0000025
= 0.25 BTC

In both instances, the cash balance increases by 0.25 BTC. As there was no pre-existing futures position to offset with, the total delivery fees paid is also the same.

When/how will this change be introduced?

The change was already rolled out on linear (USDC settled) options back in April, and this latest change to the inverse (coin settled) options will take effect on 1st August 2026. The inverse options that expire on 1st August will use this new method.

Do I need to take any action?

While no manual action is needed, API users and those with automated accounting scripts should review their integration to ensure it recognises the transition through the temporary futures position during the expiry window.

Summary

This change on inverse options completes the change of all Deribit options from cash settled options to futures settled options. The futures remain cash settled. There is no effect on profit/loss amounts or settlement currencies. Delivery fees will only be paid on the net remaining futures position after options settlement is taken into account, so traders will either pay lower delivery fees, or pay the same delivery fees as previously.