# Contracts ### Types of Contracts Offered: Platforms on the Pascal Protocol can provide a variety of derivatives contracts, including futures and options, each designed for leveraged trading, whether for speculation or hedging: * **Futures Contracts:** These are binding agreements obligating the buyer or seller to trade a specific asset at a predetermined price on a future date. They allow traders to speculate on the future price of assets or hedge against potential price movements. Futures contracts involve frequent mark-to-market and margin adjustments to reflect price changes. * **Options Contracts:** These contracts grant the holder the right, but not the obligation, to buy (call) or sell (put) an underlying asset at a set price (strike). In options trading on Pascal, the premium prices are determined by market dynamics through an order book. Futures and Options Contracts are *cash-settled* to the index price of the corresponding asset at the time of settlement. This puts the holders in the same position at expiry as they would be today vis-a-vis the underlying asset. ### Trading and Margin Process Employing conventional order book trading with an on-chain matching engine, the protocol offers enhanced transparency and efficient market price discovery. Pascal trading allows for leverage across all contracts, enabling traders to manage large positions with relatively small capital. Additionally, Pascal supports cross-margining across all positions within the same platform, enhancing capital efficiency for traders. All contracts on Pascal are USDC-margined, meaning both the margin and the settlement of gains or losses are paid in USDC. This standardisation simplifies the margin process and reduces currency risk. ### Risk Management on Pascal The Pascal protocol employs advanced risk management techniques, including a Value-at-Risk (VaR) model to manage risk exposure. This model considers the cross-correlation of traders' positions and dynamically adjusts to volatility changes. The protocol also utilises automatic margin calls as a comprehensive risk management strategy. It is designed to support contracts with diverse underlying assets, such as cryptocurrencies, commodities, and stocks. Introducing a new contract merely requires providing reliable Prices and Risk oracles for the underlying asset. A distinctive feature of Pascal is its cross-margin trading capability, seamlessly integrating cryptocurrencies with traditional financial instruments and offering traders expanded opportunities and improved capital efficiency. --- # 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.pascalprotocol.com/contracts.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.