Early Closure

OptionFair’s trading platform allows open positions to be closed prior to the scheduled expiry time. All open positions are listed in the “My Open Trades” section situated on the right hand side of Trade window. Click on the asset name to open the trading slip and view the return available for early closure. Simply click on the close button and the option will expire with this return.

The following terms are used by OptionFair™ to calculate values for closing positions prior to the scheduled
expiry time:

Market Price:The last known market price as calculated from Bid, Ask and Last Trade prices
quoted by Data Provider.

Time to Expiration: The time left until the position reaches the scheduled expiry time.

In the Money: see  “In the Money” section below

Out of the Money: see  “Out of the Money” section below

The system allows the trader to close the position prior to expiry.
The early close price (buyout price) depends on the probability (P) of the position to close “in the money”, which is calculated as a function of the following variables:

1. Time left for expiry
2. The asset’s volatility
3. Current market price
4. The strike price

Buyout value = [(Amount invested)* (P) *(payout) + (1 -P)* refund](1-commision percentage)

Where P= the probability of the position to close “in the money”

Increase in close value

The following parameters will always increase the early close value for positions currently “in the money”:

Instrument	Type of Option	Parameter	Change
All	All	Time to Expiry	Shortens
High/Low	High	Market Price	Increases
High/Low	Low	Market Price	Decreases
One Touch	No Touch	Market Price	Moves away from touch value
Boundary	In Bound	Market Price	Moves towards the middle of the boundary formed by the upper and lower target values
Boundary	Out Bound	Market Price	Moves away from the edges of the boundary formed by the upper and lower target values

Decrease in close value

The following parameters will always decrease the early close value for positions currently “in the money”:

Instrument	Type of Option	Parameter	Change
High/Low	High	Market Price	Decreases
High/Low	Low	Market Price	Increases
One Touch	No Touch	Market Price	Moves towards the touch value
Boundary	In Bound	Market Price	Moves towards the edge of the boundary formed by the upper and lower target values
Boundary	Out Bound	Market Price	Moves towards either edge of the boundary formed by the upper and lower target values

Increase in close Value

The following parameters will always increase the early close value for positions currently “out of the money”:

Instrument	Type of Option	Parameter	Change
High/Low	High	Market Price	Increases
High/Low	Low	Market Price	Decreases
One Touch	Touch	Market Price	Moves towards the touch value
One Touch	No Touch	Market Price	Moves away from touch value
Boundary	In Bound	Market Price	Moves towards the boundary formed by the upper and lower target values
Boundary	Out Bound	Market Price	Moves towards the edges of the boundary formed by the upper and lower target values

Increase in close Value

The following parameters will always decrease the early close value for positions currently “out the money”:

Instrument	Type of Option	Parameter	Change
High/Low	High	Market Price	Decreases
High/Low	Low	Market Price	Increases
One Touch	Touch	Market Price	Moves away from touch value
One Touch	No Touch	Market Price	Moves towards the touch value
Boundary	In Bound	Market Price	Moves away from the boundary formed by the upper and lower target values
Boundary	Out Bound	Market Price	Moves towards the edges of the boundary formed by the upper and lower target values

The early closure feature is not available at the following times:

1. For a certain time after the position is purchased (typically 5 minutes)
2. From the no more trades time (5-7 minutes before the expiry time when trading is not allowed)

In addition OptionFair™ reserves the right to suspend the early closure functionality at any time.