> For the complete documentation index, see [llms.txt](https://ethosx.gitbook.io/operps/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ethosx.gitbook.io/operps/settlement.md).

# Settlement

Settlement happens in OPerps every 5 minutes (except on Binance with 2 hour cycle) which consists of token transfers between Long OPerps pool and Short OPerps pool, depending upon the % price change in the underlying asset. 

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

<figure><img src="/files/INRr9xvnkTnICa5Rv026" 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="/files/XtdfMde8qAjy2jWxa00A" 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="/files/KmMvw9M5S41vQoTIloCc" alt=""><figcaption><p>SO holders pays LO pool in proportion to the rise in market. </p></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="/files/Jr9URP1apTz71ifN8gw1" alt=""><figcaption><p>SO holders pays LO pool in proportion to the fall in market. </p></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 %}