# Options Auction Knox Finance vaults sell options every epoch using a Dutch auction format. Since the auction determines the price at which options are sold, it also determines the premiums that the vault's depositors will earn for that epoch. ### Primer on Dutch Auctions Dutch auctions are a type of auction whereby the price of an asset starts high and is gradually decreased as the auction progresses. The auction ends when there are enough bidders at or above a certain price, such that the entire lot of the asset can be sold at that price. Importantly, all successful bidders in a Dutch auction pay the auction clearing price: ![](/files/GhRgiZriEIa6YfNvde7a) ### Auction Details Auctions last 30 minutes, with price decreasing along a linear price schedule. The offset delta strike represents the further-OTM option strike, it's calculated using a fixed percent offset from the delta strike. {% hint style="info" %} If a call option's delta strike is $1000, and the delta offset is 10% the offset delta strike is $1100. Likewise, if the option were a put, the offset delta strike is $900. {% endhint %} Options cannot be sold below the minimum price: * In case there are not enough bids at or above the minimum price to sell the entire lot of options, the auction will be completed partially and proportionally fewer options will be written that epoch. * In case there are no bids at or above the minimum price, the auction will be cancelled and no options will be written for that epoch. ### Auction Cancellation An auction may be cancelled if one of the following happens: 1. The auction is initialized with an invalid configuration 2. The auction prices have not been set before the auction starts 3. The auction prices are initialized with an invalid configuration 4. The auction is not processed within 24 hours of the auction end time In the event an auction is cancelled, the option buyers will be refunded the full amount paid. --- # 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/overview/options-auction.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.