Indeed, the worthless termination event cannot happen, and the intermediate safe termination event is terminal ! In fact, the termination date 𝛕 is the first time when the safe termination ** event almost occurs. In other words, 𝛕 is the first time when the collateral ratio almost reaches 170% of the current position debt: the Position Owner must (and can! as there is no price gap) redeem his position to avoid the liquidation fee, and his option payout is 170%*_CPD𝛕 - CPD**𝛕. In this scenario, the referee can see the ball almost crossing the goal line: he can blow the whistle just before and end the game! OK, in this example, the game looks frustratingly unfair: the referee is the Position Owner and the Position Owner is obviously a cheater: can he just stop the game whenever a catastrophic outcome is looming?! Honestly?! Let’s call this game the _unfair referee game.