# Settlement - Calculations and Logic

Settlement happens in OPerps every hour which consists of token transfers between Long OPerps pool and Short OPerps pool, depending upon the % price change in the underlying asset.&#x20;

{% hint style="info" %}
All Buy/ Sell orders placed during the cycle also get executed during the settlement.
{% endhint %}

<figure><img src="https://4152288119-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F7Q6AKtj9GOI4zfUD0E1b%2Fuploads%2FmWgEu07tneNziWwSEobQ%2Fimage.png?alt=media&#x26;token=bede9cb4-c0d7-4ef9-aaeb-cbdc47422636" alt=""><figcaption></figcaption></figure>

### Premium

Long OPerps holders pay premium to Short OPerps holders in every settlement independent of price change in the underlying asset.&#x20;

<figure><img src="https://4152288119-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F7Q6AKtj9GOI4zfUD0E1b%2Fuploads%2FSOSeYUi1tYF2EWdJX8wO%2Fimage.png?alt=media&#x26;token=0415830c-cef4-4197-b062-a6e2a66463c5" alt=""><figcaption></figcaption></figure>

### Payoff

Short OPerps holders pay Long OPerps holders depending upon the underlying price movement.

#### CALL Operps

Short Call OPerps holders pay Long Call OPerps holders only if the price of the underlying asset has increased during the cycle.&#x20;

<figure><img src="https://4152288119-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F7Q6AKtj9GOI4zfUD0E1b%2Fuploads%2FSbjd4BbDv2j5xIsm7Unj%2Fimage.png?alt=media&#x26;token=8657e009-926d-45eb-b52a-cefab62cf90f" alt=""><figcaption></figcaption></figure>

#### PUT Operps

Short Put OPerps holders pay Long Put OPerps holders only if the price of the underlying asset has decreased during the cycle.

<figure><img src="https://4152288119-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F7Q6AKtj9GOI4zfUD0E1b%2Fuploads%2FHGpUDTlLS7AmnG980AQM%2Fimage.png?alt=media&#x26;token=d2d13f20-d94b-4192-b78f-2adfa6a94f46" alt=""><figcaption></figcaption></figure>

Payoff is proportional to the change in underlying price. For  x% change in underlying price (rise for Calls and fall for Puts) x% tokens are transferred from respective Short Pool to the Long Pool.&#x20;

```mathml
Call Payoff = Min(% Price rise, 2.5%)
Put Payoff = Min(% Price fall, 2.5%)
```

{% hint style="info" %}
Max Loss for Short Operps holders in a cycle is limited to 2.5%.
{% endhint %}

{% hint style="info" %}
Even when Short OPerps holders pay Long OPerps holders for the market movement, they still receive the premium from Long OPerps holders.
{% endhint %}
