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Key Takeaways:

  • Stablecoin Options – Binance Options are priced and settled in stablecoin, which makes cost and profit calculations straightforward for traders even in volatile markets.
  • Low Capital Requirement – Traders only have to pay the required Options Premium to get the same exposure as holding an equivalent Futures or Spot position. As such, Options are a great way to amplify trading results due to the lower capital requirements.
  • Competitive Fees – Binance offers one of the lowest options transaction fees in the market to make Options trading cost-effective and accessible to everyone.  

Retail appetite for crypto-derivative offerings has grown alongside institutional demand. Thus creating the need for more sophisticated financial instruments. Binance’s new Options Platform addresses the need for a cost efficient product that allows traders to protect their portfolios against market volatility or to express their market views at a fixed cost – which is limited to the Options Premium.

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Binance ensures high liquidity at all times on the new Options Platform by lowering trading fees and working closely with a wide pool of experienced institutional market makers. The goal is to reduce slippage and trading costs, which is often a key concern amongst Options traders. 

In the following blog post, we explore what Binance Options are, the benefits our new Options Platform offers to traders, and how you can start trading Options today!

What Are Binance Options?

Binance Options are our newest financial instruments that give traders the right, but not the obligation, to buy or sell the underlying asset at a predetermined price and date. This form of crypto-derivatives was built for traders to gain market exposure at a fixed premium, which makes it ideal for hedging against market risks. 

Our new Options Platform allows you to buy Call Options, which is the right to buy the underlying cryptocurrency, and Put Options, which is the right to sell the underlying cryptocurrency. 

What are Call Options?

Call Options are generally used by traders anticipating a rise in the underlying cryptocurrency’s price. For a trader to profit on a Call Option using Binance Options, the underlying cryptocurrency must be trading sufficiently above the Strike Price at expiration after deducting the Options Premium paid.

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Suppose a trader believes the price of ETH will rise following a market event next week, the trader can lock in a purchase price by buying a weekly ETHUSDT Call Option. If ETHUSDT settles above the Strike Price on expiry, the trader will earn the difference between the Strike Price and the Settlement Price of ETHUSDT. Alternatively, the trader can sell the ETHUSDT Call Option back to the market before expiry to lock in a profit.

For example:

Instead of buying ETHUSDT futures for $2,000, a trader could get the same exposure by purchasing an ETHUSDT Call Option with a Strike Price of $2,000 and only pay a hypothetical cost of $300 for the Options Premium. If the price of ETH rises above $2,300 on expiry, the trader will earn a profit from this trade. 

What are Put Options?

Put Options, on the other hand, give the purchaser the right to sell at the expiry. A trader can profit from a Put Option when the underlying cryptocurrency’s price is significantly below the Strike Price to cover the Options Premium.

Suppose a trader believes the price of ETH will fall following a market event next week, the trader can lock in a selling price by purchasing a weekly ETHUSDT Put Option. If ETHUSDT settles below the Strike Price on expiry, the trader will earn the difference between the Strike Price and the Settlement Price of ETHUSDT. Alternatively, the trader can sell the ETHUSDT Put Option back to the market before expiry to lock in a profit. 

For example:

Instead of selling ETHUSDT futures for $2,000, a trader can get the same exposure by purchasing a ETHUSDT Put Option with a Strike Price of $2,000 and only pay a hypothetical cost of $300 for the Options Premium. If the price of ETH drops below $1,700 on expiry, the trader will earn a profit from this trade. 

Benefits of Trading Binance Options

Being one of the most versatile financial instruments on the market, Binance Options can offer you additional flexibility and cost efficiencies to complement your trading strategies.  

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Advantages of Binance Options

  • Competitive Fees – Binance offers one of the lowest option transaction fees in the market to make Options trading cost-effective and accessible to everyone.  
  • User-Focused Experience – Binance Options displays an intuitive user-focused interface, combined with API connectivity and convenient ways to switch assets across multiple trading products, giving traders unparalleled operational efficiency.
  • Stablecoin Options – Binance Options are priced and settled in stablecoin, which makes cost and profit calculations straightforward for traders even in volatile markets

***Listing cycle and expiry availability are subject to change based on market demand. Please refer to the Binance Options trading page for the latest availability of Option expiries.

Why You Should Trade Binance Options

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  • Portfolio Protection – You can hedge your risk via Binance Options. If you are a long-term investor concerned about market volatility, you can buy Put Options to protect your portfolio against downturns and offset the losses
  • Tailored Strategies – A combination of different Strike Prices, Expiry Dates, and types of Options can help you employ directional or neutral trading strategies to profit regardless of the underlying asset’s direction.
  • Limited Risk – With Binance Options, the maximum losses you can incur are capped to the Options Premium while the upside potential is unlimited for Call Options.
  • Alternative Trading Opportunities – Options prices are affected by the underlying asset’s price move and other factors such as volatility and time value, allowing you to take positions not just on price directions but also volatility trends. 
  • Low Capital Requirement – You only have to pay the required Options Premium to get the same exposure as holding an equivalent Futures or Spot position. As such, Binance Options are a great alternative for you to amplify trading results due to the lower capital requirements.

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