Binance, the leading digital asset trading platform, has launched a new options trading platform that enables cryptocurrency investors to trade Bitcoin and Ethereum options. To commemorate the launch of the revamped options offerings, Binance has kickstarted an exclusive promotion that lets all options traders earn a 30% rebate on their options trading fees.
What is Binance Options?
Binance Options is a cryptocurrency trading platform that enables users to buy contracts that carry the rights to purchase or sell spot assets at a predetermined price upon their expiration. The difference between the actual price of the physical asset at the contract’s end, and the price that was included in the contract (strike price), determines how big of a profit (or how much of a loss) the user earned in the trade.
Both call options – contracts that give owners the right, but not the obligation, to buy crypto at before agreed upon price – and put options – contracts that give owners the right, but not the obligation, to sell crypto at before agreed upon price – on Binance are European-style. This means that traders have to wait until the expiration date to exercise their options. However, European-style options can still be sold before their expiration in exchange for the net difference between the premiums earned and the initial cost of the call/put option.
As of October 2022, there are two types of crypto options on Binance when it comes to their underlying asset – Bitcoin options and Ethereum options. Each options market offers different expiration dates, with different contract sizes.
Expiration dates for BTC options:
Expiration dates for ETH options:
Binance uses the so-called Black-Scholes option model to determine the value of options on the platform. Users can see the theoretical fair price of different BTC and ETH options right from the crypto options trading interface.
How to trade options on Binance
Here’s a brief overview of options trading on Binance. Keep in mind that you need to register an account on Binance before you can engage in options trading on the platform.
Step 1: Open the Options platform
After logging into your Binance account, select Options from the Derivatives dropdown menu.
Step 2: Open the Options account
If this is the first time opening the Options trading platform, you must agree to the terms and conditions and click on Open Options Account before proceeding.
Step 3: Select an option contract from the menu
To buy an option, you first need to fund your options account, transferring funds from the spot account to the options account. Select the expiration date you would like to use and the preferred strike price. In our example, we’re buying the Bitcoin call option with a 7-day expiration date.
Step 4: Buy an option
After selecting the option, you must enter the amount of funds you are willing to spend on it. The contract’s size is dependent on the expiration date and strike price of each contract. Click Buy to confirm your order.
Step 5: Close the option before the expiration
If, for any reason, you want to get rid of an options contract before its expiration, you can do so by clicking on the Close button, and enter the amount you wish to sell. You can sell your entire position, or just a part of it.
Step 6: Hold the option until expiration
If you don’t sell your contract, the option will automatically be exercised at the time of expiration.
Binance Options trading fees
Binance charges one of the lowest rates for options products in the market. However, it is still good to know what fees and how much can you expect to pay when using the service.
Transaction Fee – 0.02%
Every time you open or close a position on Binance Options, you will incur a transaction fee. The fee is calculated based on the underlying asset’s spot price at the time of the order completion. The transaction fee rate on Binance is 0.02%.
Exercise Fee – 0.015%
When the options product is exercised, a user incurs an exercise fee. The fee is calculated based on the settlement price at the time of the order completion. The going rate for the exercise fee on Binance is 0.015%.
It is worth noting that both transaction and exercise fees are capped at 10% of the option’s market value.
Binance Options promotion – 30% rebate for all traders, 30% commission for affiliates
In celebration of the rollout of a revamped and streamlined Options trading platform, Binance launched an exclusive promotion that will see all Options traders earn 30% rebates of their Options trading fees. What’s more, an exclusive affiliate promotion will award all Binance Affiliates with a 30% commission on fees generated on Binance Options by their referrals.
The promotion started on October 3, at 4:00 UTC, and is slated to run until December 31, at 23:59 UTC.
It is worth noting that Daily Options (products with a 24-hour expiration date) won’t be eligible for the trading fee rebate, nor for the affiliate commission promotion
A new and improved Binance Options platform allows crypto investors to tap into derivatives markets to generate returns with European-style contracts. Low fees and an intuitive trading interface make Binance Options one of the best choices for those looking to trade options.
Moreover, the exclusive 30% trading fee rebate promotion makes the already sweet deal even sweeter – keep in mind that the promotion ends on December 31, so hurry up and make the most of it while you still have the chance.
David is a crypto enthusiast and an expert in personal finance. He has created numerous publications for different platforms. He loves to explore new things, and that’s how he discovered blockchain in the first place.