# 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.&#x20;

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

<figure><img src="https://2063155529-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0E3bPQzFVU4NUp6wFLua%2Fuploads%2Fl64ImhIWQH61U5KPLOvj%2Fsettlement04.jpg?alt=media&#x26;token=769f7361-d544-4f83-ae23-c56793ad6149" 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://2063155529-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0E3bPQzFVU4NUp6wFLua%2Fuploads%2FJA7b9nMUOQjjLgrOHOhR%2Fsettlement01.jpg?alt=media&#x26;token=791e4bf3-8d40-4424-90a9-9dcc1a493a88" 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://2063155529-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0E3bPQzFVU4NUp6wFLua%2Fuploads%2FkdHDp9GHm48FB7tb0ahQ%2Fsettlement03.jpg?alt=media&#x26;token=12b21812-5cca-42ef-ae6a-db6c91ae101f" 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="https://2063155529-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0E3bPQzFVU4NUp6wFLua%2Fuploads%2FFTOSJaJ3BfXX5int1nGm%2Fsettlement02.jpg?alt=media&#x26;token=bcb9ef57-e2f1-47fb-80e3-53fea1305d8f" 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 %}

