Settlement Logic at Expiration (Expired)

Updated: January 7, 20262 min read

1. Purpose of this article

This article describes how OptionsApp calculates prices in the evaluation, particularly in connection with options expiration. The focus is on SPXW options as well as the distinction between actual executions, options expiration, and settlement-based settlements.

2. Price calculation at opening and regular closing

For regular trade openings and closings via orders, OptionsApp uses the actual executions from the trade history of Trader Workstation. Once this data is available via the IB API, the real execution prices, times, and commissions are used.

If executions are initially missing, they can be reloaded by refreshing the trade history (e.g., the last seven days). See: Amount of position(s) of the contract is not matching

3. Special features for expiration of SPX options (SPXW)

When options expire, there is no closing order. Instead, settlement takes place via the exchange's official settlement mechanism.

SPXW options are cash-settled index options with PM settlement. The settlement price of the S&P 500 Index, as determined by the CBOE, is decisive here and is determined in the afternoon of the expiration date.

The settlement time is approximately 4:00 PM US Eastern Time, which typically corresponds to 10:00 PM German time. This settlement price finally determines the ITM or OTM status as well as the settlement amount.

4. Technical limitation in settlement via IB

The final settlement amount from an options expiration is not directly available via the IB API. In the trade history, this amount often appears only the next day after Interactive Brokers has processed the settlement.

This limitation is technical in nature and cannot be worked around by OptionsApp. The settlement price itself is not provided directly via the IB API but must be derived from official exchange data.

5. OptionsApp's valuation logic at options expiration

After expiration, OptionsApp checks whether:

the official CBOE settlement price is already available.
If the settlement price has not yet been published, the final settlement value cannot be determined exactly. In this case, OptionsApp displays a preliminary, estimated value based on the best available market data.
Once the official settlement price is published, the ITM or OTM status is clearly determined and the correct settlement amount is calculated. The evaluation is then automatically updated and corresponds to the actual economic result of the trade.

6. Classification of possible deviations in evaluation

Timing deviations between the evaluation on the expiration date and the final settlement in the account result from the PM settlement logic, the delayed publication of the settlement price, and the technical limitations of the IB API.

OptionsApp uses the best data available at the time and replaces preliminary valuations once final settlement data arrives.