Ann writes a put option to John, which allows John to sell 1 BTC for 30,000 USDC (strike price). Ann's USDC collateral is locked in the vault. John acquired the option by buying it on RiskSwap through the Order Book.
Scenario 1: Let’s say the price of BTC goes down to 25,000 USDC on the contract's expiration date. That means John’s option is now in the money and RiskSwap will automatically exercise the option by reserving 5,000 USDC from Ann’s vault for John’s vault. After the expiration date John will be able to withdraw 5,000 USDC profit from his vault.
Scenario 2: Let's say the price of BTC goes up to 35,000 USDC, so the option's execution price is zero, so no funds are transferred from John to Ann and vice versa.