# Exercising Options Options purchased on Knox Finance are issued by Premia, which means they are automatically exercised upon expiry. Since they are American options, they can also be exercised manually any time before expiry. ### Settlement With Premia's design, options are settled in the underlying asset. When exercised or upon expiry, the intrinsic value of the option is paid directly to the option holder: > If at the time of exercise, the price of the underlying asset is higher than the breakeven price, the call option is considered **In The Money**. In this case, the user is entitled to the payoff, which is equal to the strike price of the underlying minus the spot price. This difference is calculated automatically and settled **in the underlying asset** (the quote token) to the option buyer. For more information about exercising options and their settlement, consult the [Premia documentation](https://docs.premia.finance/). --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.knox.premia.finance/option-buyers/exercising-options.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.