Forced Exercise

This page defines force-exercise roles and eligibility. For the trader workflow, see Force Exercise; for V2 calculation details, see Force Exercise Cost. How long options can be exercised by external users.

Force Exerciser (Anybody)

Given that Panoptions are expirationless, option buyers may hold their position to perpetuity. In order to prevent option sellers from becoming locked into their position forever, option sellers (or any external party) may force exercise an option buyer's position at any time for a fee.

Force Exercisee (Buyer)

For Panoptions, there is a risk that a long option position may be forced to close due to an external party exercising the option. The long option holder receives a fee as compensation.

To mitigate forced exercise risk, it is important to monitor positions closely and be prepared to adjust or close the position if needed.

Single-leg positions

For single-leg positions, only long positions may be force exercised. Short positions cannot be force exercised.

Multi-leg positions

For multi-leg positions, force exercising closes all legs of the position.