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Binance Options
About Binance Options
Binance
2020-06-29 03:14

Binance Options offers a lower entry barrier and provides flexibility to option traders.  Traders are now allowed to take advantage of the price movement within different time frames and enjoy unlimited profit upsides with limited risks. Binance Options are intuitively designed to enhance traders’ trading experience, unlike traditional options products.

Binance Options is an American style option, therefore, traders can execute the contract any time before the expiry date. Our product offers a shorter time frame compared to traditional options, ranging from 10 mins to 1 day. 

The traditional options products tend to be less liquid, especially for options that are far out-of-the-money. To avoid this, Binance Options are designed with only one strike price which is equivalent to the contract price on Binance Futures.

Traders can only be a buyer of Binance Options as Binance is the sole issuer (option seller). Therefore, there is no order book on Binance Options. An option contract will remain valid until the holder exercises the option any time before the expiry date or when the option expires. The maximum loss on each position would be the premium paid for the options. The breakeven point would be the Strike Price plus or minus Premium (depending on if it is a call or a put).

 

Contract Specifications of Binance Options

Binance Options Trading Interface

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  1. Underlying asset
  2. Current local time on trader’s phone
  3. Balance: The available balance can be used on Binance Options is the available balance to withdraw on Binance Futures
  4. Transfer: Trader can transfer funds from the Spot Wallet to the Futures Wallet
  5. Binance Options user guide
  6. Expiry date - Trader can choose 10 minutes, 30 minutes, 1 hour, 8 hour and 1 day of expiry date
  7. Underlying asset chart
  8. Positions (of unexercised options):  “C” for call option; “P” for put option
  9. Place order: Traders can only be a buyer on Binance Options. 
  10. Position tab
  11. History of exercised/settled options
  12. Description of purchased options
  13. The time when buying an option 
  14. Purchased quantity (in contract unit)
  15. Strike price: The underlying price when the order is placed. The strike price displayed might be different from the actual last price of the underlying asset when there is a high market volatility.
  16. Premium: The total price trader paid to purchase the option
  17. Breakeven price
    - Breakeven Price of Call Option = Strike Price + (Premium/Quantity)
    - Breakeven Price of Put Option = Strike Price - (Premium/Quantity)
  18. Time to Expiration: Remaining time until expiration date
  19. Unrealized PNL 
    - Unrealized PNL of Call Option = Max [ ( Underlying Price- Strike Price ) * Quantity,  0 ]
    - Unrealized PNL of Put Option = Max [ ( Strike Price - Underlying Price ) * Quantity,  0 ]
    - The maximum loss a trader could incur is the premium paid. 
  20. Settle: Trader can exercise the option before or upon the expiry.

 

Important Disclaimers Regarding Options Trading

Premium / Profit Note
The premium is first deducted from the futures wallet balance, and only after is profit calculated. In rare cases, this deduction may cause the futures position to enter liquidation. Before placing an options order, please ensure that you have adequate free margin in your futures wallet balance. Note that to make a net profit on an options trade, the profit must be larger than the premium. Profit will be anything from 0 to infinity, and premium is a fixed value paid at start. Thus options have fixed downside cost paid upfront, and unlimited upside. Net profit for your options trade is profit - premium.

Price Disclaimer
All trades are executed on the market at market price. There is no guarantee that the price you see on screen will be the exact price that you execute at, although it will generally be very close. Small orders, or orders executing during 'normal' market behavior will always be nearly exact, but large orders, or orders that execute during 'volatile' market behavior, may deviate somewhat based on order execution.

Risk Warning
There is no guarantee that your options purchase will execute at a profit after the premium has been deducted. Most options purchases will not be profitable, but a minority will be very profitable. Please use at your own discretion.

 


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