> ## Documentation Index
> Fetch the complete documentation index at: https://docs.rails.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Settlement & Expiry

> How contracts expire and settle in cash

Rails options are **cash-settled**. At expiry they settle automatically in cash — there is
no manual exercise step and no delivery of the underlying. For the payoff and PnL math, see
[Settlement](/latest/options/formulas/settlement).

## Expiry Schedule

Every contract expires at 08:00 UTC on its expiry date (encoded in the
[contract name](/latest/options/guides/instruments-and-symbols) — e.g. the `19JUN26` in
`BTC-19JUN26-62000-C`). Contracts are listed on weekly and monthly cadences.

Around expiry a contract moves through `ACTIVE` → `EXPIRED` → `SETTLED`; see
[Contract Status](/latest/options/guides/instruments-and-symbols#contract-status) for what
each state means.

## How Settlement Works

At 08:00 UTC on the expiry date, trading stops and each contract settles against the
underlying's settlement price:

* **In-the-money** positions pay out their intrinsic value (a call pays `settlement − strike`,
  a put pays `strike − settlement`).
* **Out-of-the-money** positions expire worthless.

Your realized PnL nets the payoff against what you paid or received to open, and a small
delivery fee applies to profitable long positions. See
[Settlement](/latest/options/formulas/settlement) for the exact formulas.

## Tracking Settlements

Settlement is automatic — no action is required. Results for your account are delivered on
the [Settlements Stream](/latest/options/websocket-api/settlements-stream), and the
resulting balance changes are reflected in your
[Account Summary](/latest/options/websocket-api/account-summary-stream).