Expiration and Exercise of Options
Title: Physical Exercise vs Cash Settlement: How do expiries work? 🔄📌
Content:
At the expiration of an options contract, the settlement mechanism depends on the type of platform and instrument used.
💡 The two modes:
Cash Settlement: The value difference between the Strike and the closing price is directly credited or debited in Stablecoins (the most common mode in crypto).
Physical Delivery: The underlying asset is actually transferred between the buyer and the seller.
Always check the settlement mode of your contracts before they expire!
#OptionsSettlement #CryptoKnowledge #BinanceAcademy #TradingExecution
12. Execution Discipline: Limit Order vs Market Order
Title: Why prefer Limit Orders in the options market 🎯🛒
Content:
Executing at market on the options order book can lead to surprises due to the Bid-Ask Spread.
📌 Execution tips:
Always use Limit Orders: Set the exact maximum price you’re willing to pay for your premium.
Bring the order closer to the average price (Mark Price): This optimizes your chances of execution without suffering price slippage.
Make sure there is sufficient liquidity on the order book for the selected Strike.
Saving even a fraction of a Stablecoin at entry increases your final profitability.
#LimitOrders #ExecutionStrategy #TradingTips #BinanceSquare @Dusk
Title: Physical Exercise vs Cash Settlement: How do expiries work? 🔄📌
Content:
At the expiration of an options contract, the settlement mechanism depends on the type of platform and instrument used.
💡 The two modes:
Cash Settlement: The value difference between the Strike and the closing price is directly credited or debited in Stablecoins (the most common mode in crypto).
Physical Delivery: The underlying asset is actually transferred between the buyer and the seller.
Always check the settlement mode of your contracts before they expire!
#OptionsSettlement #CryptoKnowledge #BinanceAcademy #TradingExecution
12. Execution Discipline: Limit Order vs Market Order
Title: Why prefer Limit Orders in the options market 🎯🛒
Content:
Executing at market on the options order book can lead to surprises due to the Bid-Ask Spread.
📌 Execution tips:
Always use Limit Orders: Set the exact maximum price you’re willing to pay for your premium.
Bring the order closer to the average price (Mark Price): This optimizes your chances of execution without suffering price slippage.
Make sure there is sufficient liquidity on the order book for the selected Strike.
Saving even a fraction of a Stablecoin at entry increases your final profitability.
#LimitOrders #ExecutionStrategy #TradingTips #BinanceSquare @Dusk