What Are Cryptocurrency Options?
Options trading allows buyers to exercise specific rights at predetermined future dates according to contract terms. Buyers may execute (if favorable) or forfeit rights (if unfavorable), while sellers must fulfill obligations.
Types of Options Contracts
- Call Options: Right to buy an asset at a fixed price.
- Put Options: Right to sell an asset at a fixed price.
👉 Learn how to start options trading
Key Features of Binance’s European-Style Options
Contract Specifications
Example: BTC-210326-19000-C
- Asset: BTC
- Expiry: 2021-03-26 (16:00 UTC)
- Strike Price: 19,000 USDT
- Type: Call (C) / Put (P)
Settlement Methods
- Cash Settlement: No physical asset delivery; profit/loss paid in USDT.
Risk Controls
- Price Limits: Orders rejected if outside ±adjustment coefficient × max volatility range.
- Position Limits: Max 40 BTC per order; 6 open orders per contract.
Advanced Parameters Explained
| Term | Definition |
|------------|--------------------------------------------|
| Delta | Price change per $1 move in underlying. |
| Gamma | Delta’s rate of change. |
| Theta | Daily time decay impact. |
Trading Process
- Account Funding: Transfer USDT to Binance’s options account.
Order Types:
- Buy calls/puts (no leverage).
- Sell naked options (requires margin).
Fees & Margin
- Trading Fee: 0.03% of contract value.
- Exercise Fee: 0.1% (charged if profitable).
Margin Requirements:
- Buyers: Full premium paid upfront.
- Sellers: 10–15% initial margin.
FAQs
Q: Can I trade options without leverage?
A: Yes. Buying calls/puts uses no borrowed funds.
Q: What triggers liquidation?
A: Account equity ≤ maintenance margin (e.g., 7.5% for BTC).
Q: How is settlement priced?
A: Based on 1-hour TWAP before expiry.
Summary
Binance’s cash-settled options offer flexibility but demand risk awareness. Use limit orders and monitor margin levels closely.
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