options
32,560 views
100 Posts
Hot
Latest
Good morning everyone, #shanghaiupgrade is coming this week, and I have written 2 small articles about what strategies and smart money are doing #ETH
❤️Follow me,focus on #options & #airdrop 💛
❤️Follow me,focus on #options & #airdrop 💛
0DTE option traders turn aggressive, stock market facing insane volatility 📈📈
With their well-advertised long biases in fixed income vs underweight in equities, hedge fund and professional money managers have been scrambling to add long-call exposures in the SPX over the past few sessions as stocks squeezed higher. The ferocious market rally blew past the areas of max call exposures in a hurry (~4185 on cash SPX), with 0DTE players having flipped to (supposedly) net short gamma since April, thus adding further rally fuel on the way up. Street research now estimates market gamma to be back positive at the current index levels, and we'll also be seeing a decent sized OpEx expiry today which should add to an exciting close to the week. #options
With their well-advertised long biases in fixed income vs underweight in equities, hedge fund and professional money managers have been scrambling to add long-call exposures in the SPX over the past few sessions as stocks squeezed higher. The ferocious market rally blew past the areas of max call exposures in a hurry (~4185 on cash SPX), with 0DTE players having flipped to (supposedly) net short gamma since April, thus adding further rally fuel on the way up. Street research now estimates market gamma to be back positive at the current index levels, and we'll also be seeing a decent sized OpEx expiry today which should add to an exciting close to the week. #options
Used Range Bound to short BTC's Vol last week, earn
🛑APR 480%.🚀🚀🚀
The research and investment of some option structured products will be updated in the future. #BTC #options #RangeBound
🛑APR 480%.🚀🚀🚀
The research and investment of some option structured products will be updated in the future. #BTC #options #RangeBound
LIVESober聊期权-CFA
--
I am not optimistic about breaking through 3W this week, so I shorted BTC and added range bound products, and I will see the results on Friday. #BTC #Range bound
Used Range Bound to short BTC's Vol last week, earn
🛑APR 480%.🚀🚀🚀
The research and investment of some option structured products will be updated in the future. #BTC #options #RangeBound
🛑APR 480%.🚀🚀🚀
The research and investment of some option structured products will be updated in the future. #BTC #options #RangeBound
LIVESober聊期权-CFA
--
Talk about Binance’s options products Range Bound
Binance recently launched a product called Range Bound among its wealth management products, the link is as follows
https://www.binance.com/en/rangebound（English）
Product Entry
Product Revenue
Range Bound, this product means that the investors choose a date + an interval for wealth management. If the price does not jump out of range, the investors will get the corresponding income (the APR in the above picture is the annualized return). But once the price touch up or down point at any time, the product will be stopped immediately, and the investors' account will have a certain small losses (generally around 1-3%, depending on the length of time and the price width)
It supports both methods of stable coin and underlying coin (that is, the USD basis and crypto basis mentioned by options investors, the USD basis requires a longer expiration time, mainly based on liquidity consideration)
Compared with traditional wealth management and options, Range Bound has the following advantages:
1 (Key point) With the traditional options structure, the risk of the seller is unlimited. Especially for rookie options sellers, it is easy to oversell while shorting the volatility and lead to liquidation when encountering extreme market conditions. However, Range Bound makes the unlimited risk of the seller convert into limited risk of the buyer.
2 Compared with the Dual Investment, the Range Bound users will not cause short term losses due to selling the underlying asset too early. For example, during an extreme unilateral market condition, the price suddenly rises by 50% in half a month. The Dual Investment would convert investors’ coins into USD, causing the investors to miss large potential gains. On the other hand, the loss of the Range Bound investors is very limited, and it will not change whether the investors are a currency standard or a USD standard.
3 The Range Bound supports stable coins and BTC ETH (users can directly choose U standard or currency based options to short volatility), and investors will not change their overall position distribution when buying the Range Bound, which is safer than the Dual Investment. To avoid being forced to switch between USD and coin in a unilateral market, selling or buying too early. Compared with the Dual Investment, the Range Bound can take on more user positions.
4 The Range Bound belongs to high level wealth management in the traditional financial market, and the design of similar barrier options such as snowballs in the traditional market is relatively complicated. The Range Bound is designed based on DNT and support stable coins and underlying currencies, which is more flexible and convenient. Short, medium and long cycles can be selected according to the needs of the investors.
5 The income of the Range Bound is higher than the Dual Investment. As shown in the figures, as long as BTC price does not exceed 31,500, the annualized return of the Range Bound would be 30% higher than Dual Investment (of course, we should take the losing risk of Range Bound into consideration)
Dual Investment
Range Bound
6 The Range Bound can make investors pay more attention to the amplitude and fluctuation, rather than only the price. It can better break away from the idea of guessing the market rising or falling, improving investors' trading thinking.
To be fair, Range Bound is not a perfect product, and has the following shortcomings
1 For the investors, it is necessary to make a certain judgment on the market (because if the judgment is wrong, there will be a risk of a slight retracement of the principal ranging from 0.5% to 2%. Unlike the Dual Investment, One can comfort oneself by reducing or increasing underlying asset). The Range Bound is close to the R3 level products of the stock market, that is, there are small fluctuations, no large retracement, and no explosive growth in earnings. After all, there are always several big market touches the up or down point every year.
2 The income of the Range Bound has a greater relationship with market fluctuations, so when buying in a bear market, it will also suffer losses when it encounters a sharp drop.
3 At present, the Range Bound has not developed the options of ultra-long term and ultra-wide, and I believe it will be improved in the future.
Finally, let's take a look at the underlying design of the Range Bound
The Range Bound is essentially a kind of exotic option, but it is a relatively simple type. It is mainly generated based on the optimization of DNT options. Let's briefly introduce DNT options
DNT stands for "Double No Touch" In DNT options, investors need to set two barrier prices, an upper barrier and a lower barrier. If the price of the underlying asset has not touched the price range between these two barriers when the options expires, the option will be automatically exercised when the option expires, and investors will obtain fixed income; if the price of the underlying asset has touched If the price range between these two barriers is exceeded, the option will be invalidated automatically, and the investor will lose the premium paid when buying the option. (The amount of loss that the Range Bound was touched)
DNT is a relatively well understood exotic option, because the strategy looks like a short volatility investor + stop loss operation (while the crypto investment market lacks suitable short volatility products) double sell when the price breaks through When the price is close, the loss caused by the immediate stop loss (actually manifested as the loss of premium), but this series of operations is packaged into a buyer's product, and the loss is locked in, so as not to bear greater risks. Of course, as for the underlying design of this option, it is more complicated, we will not introduce it in detail, and the requirements for the designer's strategy + execution ability are relatively high. Because if the underlying optimization is unfavorable, the cost of the option will be too high (the user loss is too large after the touch, and the interval treasure is locked at around 2%. I believe that investors who have been options sellers know that this ratio is quite stable), Therefore, it is best to avoid small CEX for such products, otherwise, in extreme market conditions, the CEX may have the risk of Rug pull.
Article was written by Sober（❤️Follow me, focus on #Options ）
https://www.binance.com/en/rangebound（English）
Product Entry
Product Revenue
Range Bound, this product means that the investors choose a date + an interval for wealth management. If the price does not jump out of range, the investors will get the corresponding income (the APR in the above picture is the annualized return). But once the price touch up or down point at any time, the product will be stopped immediately, and the investors' account will have a certain small losses (generally around 1-3%, depending on the length of time and the price width)
It supports both methods of stable coin and underlying coin (that is, the USD basis and crypto basis mentioned by options investors, the USD basis requires a longer expiration time, mainly based on liquidity consideration)
Compared with traditional wealth management and options, Range Bound has the following advantages:
1 (Key point) With the traditional options structure, the risk of the seller is unlimited. Especially for rookie options sellers, it is easy to oversell while shorting the volatility and lead to liquidation when encountering extreme market conditions. However, Range Bound makes the unlimited risk of the seller convert into limited risk of the buyer.
2 Compared with the Dual Investment, the Range Bound users will not cause short term losses due to selling the underlying asset too early. For example, during an extreme unilateral market condition, the price suddenly rises by 50% in half a month. The Dual Investment would convert investors’ coins into USD, causing the investors to miss large potential gains. On the other hand, the loss of the Range Bound investors is very limited, and it will not change whether the investors are a currency standard or a USD standard.
3 The Range Bound supports stable coins and BTC ETH (users can directly choose U standard or currency based options to short volatility), and investors will not change their overall position distribution when buying the Range Bound, which is safer than the Dual Investment. To avoid being forced to switch between USD and coin in a unilateral market, selling or buying too early. Compared with the Dual Investment, the Range Bound can take on more user positions.
4 The Range Bound belongs to high level wealth management in the traditional financial market, and the design of similar barrier options such as snowballs in the traditional market is relatively complicated. The Range Bound is designed based on DNT and support stable coins and underlying currencies, which is more flexible and convenient. Short, medium and long cycles can be selected according to the needs of the investors.
5 The income of the Range Bound is higher than the Dual Investment. As shown in the figures, as long as BTC price does not exceed 31,500, the annualized return of the Range Bound would be 30% higher than Dual Investment (of course, we should take the losing risk of Range Bound into consideration)
Dual Investment
Range Bound
6 The Range Bound can make investors pay more attention to the amplitude and fluctuation, rather than only the price. It can better break away from the idea of guessing the market rising or falling, improving investors' trading thinking.
To be fair, Range Bound is not a perfect product, and has the following shortcomings
1 For the investors, it is necessary to make a certain judgment on the market (because if the judgment is wrong, there will be a risk of a slight retracement of the principal ranging from 0.5% to 2%. Unlike the Dual Investment, One can comfort oneself by reducing or increasing underlying asset). The Range Bound is close to the R3 level products of the stock market, that is, there are small fluctuations, no large retracement, and no explosive growth in earnings. After all, there are always several big market touches the up or down point every year.
2 The income of the Range Bound has a greater relationship with market fluctuations, so when buying in a bear market, it will also suffer losses when it encounters a sharp drop.
3 At present, the Range Bound has not developed the options of ultra-long term and ultra-wide, and I believe it will be improved in the future.
Finally, let's take a look at the underlying design of the Range Bound
The Range Bound is essentially a kind of exotic option, but it is a relatively simple type. It is mainly generated based on the optimization of DNT options. Let's briefly introduce DNT options
DNT stands for "Double No Touch" In DNT options, investors need to set two barrier prices, an upper barrier and a lower barrier. If the price of the underlying asset has not touched the price range between these two barriers when the options expires, the option will be automatically exercised when the option expires, and investors will obtain fixed income; if the price of the underlying asset has touched If the price range between these two barriers is exceeded, the option will be invalidated automatically, and the investor will lose the premium paid when buying the option. (The amount of loss that the Range Bound was touched)
DNT is a relatively well understood exotic option, because the strategy looks like a short volatility investor + stop loss operation (while the crypto investment market lacks suitable short volatility products) double sell when the price breaks through When the price is close, the loss caused by the immediate stop loss (actually manifested as the loss of premium), but this series of operations is packaged into a buyer's product, and the loss is locked in, so as not to bear greater risks. Of course, as for the underlying design of this option, it is more complicated, we will not introduce it in detail, and the requirements for the designer's strategy + execution ability are relatively high. Because if the underlying optimization is unfavorable, the cost of the option will be too high (the user loss is too large after the touch, and the interval treasure is locked at around 2%. I believe that investors who have been options sellers know that this ratio is quite stable), Therefore, it is best to avoid small CEX for such products, otherwise, in extreme market conditions, the CEX may have the risk of Rug pull.
Article was written by Sober（❤️Follow me, focus on #Options ）
The current market IV is very low, next week will be the Hong Kong summit, the seller Zhou Qiqi opens a position, the cost performance is very low, it is suitable to wait
#options #hongkongweb3
#options #hongkongweb3
During the long weekend holidays in the United States, there is generally no market. Because of the bank, the funds deposited on weekends cannot reach the account. If the option trading is done today, the IV is relatively higher, and it will be lower in two days.#options
Bitcoin’s $2 Billion Options Expiry: A Look at Potential Support and Market Impact ⚠️
#BTC traders are focused on the $31,000 price level with a $2 billion Bitcoin #options expiry on July 28. The recent interest rate increase by the U.S. Federal Reserve affected risk-on assets like cryptocurrencies, but Bitcoin bulls believe its impact takes time.
Previous monthly expiries caused rallies and corrections. Bulls have regulatory and ETF momentum, with major fund managers requesting spot Bitcoin #ETFs , and U.S. House bills aiming to clarify distinctions between securities and digital commodities.
Positive corporate earnings and consumer confidence data support bullish momentum, indicating a reduced recession risk in the short term.
#Binance
#crypto2023
#BTC traders are focused on the $31,000 price level with a $2 billion Bitcoin #options expiry on July 28. The recent interest rate increase by the U.S. Federal Reserve affected risk-on assets like cryptocurrencies, but Bitcoin bulls believe its impact takes time.
Previous monthly expiries caused rallies and corrections. Bulls have regulatory and ETF momentum, with major fund managers requesting spot Bitcoin #ETFs , and U.S. House bills aiming to clarify distinctions between securities and digital commodities.
Positive corporate earnings and consumer confidence data support bullish momentum, indicating a reduced recession risk in the short term.
#Binance
#crypto2023
What are #options ?
For intermediate and expert traders.
For newbies just read it, only trade with what you understand.
I just found that and it is different from futures. Some details:
⚪ Traditional market´s volume of Options are higher than futures and spot together
⚪ Contracts between two parties to buy/sell an asset in the future at a given price
⚪One party has the right, but NOT the obligation, to carry out the transaction at that fixed price (with Futures you have to buy or sell it)
⚪Similar to futures, BUT no risk of liquidations (with Futures, high risk)
⚪Have to pay some fee (Futures don´t assume previous costs)
⚪Loose value as expiry date approaches (in futures, time doesn´t affect them)
⚪More flexible and you can adapt them (futures are more standarized)
Source: Healthy_pockets
For intermediate and expert traders.
For newbies just read it, only trade with what you understand.
I just found that and it is different from futures. Some details:
⚪ Traditional market´s volume of Options are higher than futures and spot together
⚪ Contracts between two parties to buy/sell an asset in the future at a given price
⚪One party has the right, but NOT the obligation, to carry out the transaction at that fixed price (with Futures you have to buy or sell it)
⚪Similar to futures, BUT no risk of liquidations (with Futures, high risk)
⚪Have to pay some fee (Futures don´t assume previous costs)
⚪Loose value as expiry date approaches (in futures, time doesn´t affect them)
⚪More flexible and you can adapt them (futures are more standarized)
Source: Healthy_pockets
Extend Your Crypto Trading Strategy With Crypto Options
Before going further let me highlight the important things that you should understand in this article:
What are Binance Options?
How to trade Binance Options
What are the USPs of Binance Options products?
What is the difference between Binance Options and Binance Futures?
Hedging with Binance Options
What are Binance Options?
Options traders deal with different variables than those who trade on the futures and spot markets. Options trading can be intimidating at times, especially to newcomers. The seemingly complex mechanics and dense financial jargon surrounding these financial instruments make options trading out of reach for many retail investors. In addition to the knowledge of the technical aspects of trading, options traders must understand how certain variables affect options’ prices.
How To Trade Binance Options
1. Open a Binance account: You will need to create an account on Binance if you don't already have one by completing verification.
2. Deposit funds: Once your account is created, you will need to deposit funds into your account. You can do this by clicking on the "Deposit" button and selecting your preferred payment method or using Binance P2P easiest method to fund your Binance account. For Example in Tanzania put the Currency TZS, then select a Verified merchant with a yellow tick, and click on "Buy" as seen in the following image 👇
3. Navigate to the options trading platform: Once your account is funded, navigate to the options trading platform. You can do this by clicking on the "Options" tab in the top menu bar.
4. Choose an option: Select the option that you want to trade. You can choose from a variety of options, including Call and Put options.
5. Set your trade parameters: Set your trade parameters, including the expiration date, strike price, and the amount you want to trade.
6. Place your trade: Once you have set your trade parameters, click on the "Buy" or "Sell" button to place your trade.
7. Monitor your trade: After placing your trade, monitor it closely to see how it performs. You may want to set stop-loss orders or take-profit orders to limit your losses or lock in profits.
It's important to note that options trading can be risky, so it's important to do your research and understand the risks involved before trading.
What are the USPs of Binance Options products?
Low fees: Binance offers some of the lowest fees in the industry for options trading, making it an attractive option for traders.
Wide range of options: Binance offers a wide range of options, including European and American style options, as well as a variety of strike prices and expiration dates.
User-friendly platform: Binance's options trading platform is designed to be user-friendly, with intuitive navigation and clear instructions.
Advanced trading tools: Binance offers advanced trading tools such as stop-loss orders, take-profit orders, and margin trading to help traders manage their risks and maximize their profits.
High liquidity: Binance's options market has high liquidity, which means that traders can easily buy and sell options at competitive prices.
Security: Binance has a strong reputation for security, with robust security measures in place to protect users' funds and personal information.
In summary; Binance Options product offers a comprehensive and user-friendly options trading experience with low fees, advanced trading tools, and high liquidity.
What is the difference between Binance Options and Binance Futures
Binance Options is a derivative product that allows traders to buy or sell options contracts, which give them the right (but not the obligation) to buy or sell an underlying asset at a predetermined price and time. Options trading is a more flexible and customizable way of trading than futures, as it allows traders to choose their own strike prices and expiration dates.
On the other hand, Binance Futures is a derivative product that allows traders to buy or sell futures contracts, which are agreements to buy or sell an underlying asset at a predetermined price and time in the future. Futures trading is more standardized than options trading, as the contracts have set expiration dates and contract sizes.
Rights and obligations
One of the primary differences between the two instruments is their method of execution. An options buyer has the choice not to exercise the contract if the market moves against their position. In contrast, a futures contract holder must execute the contract at expiry, regardless of the market conditions.
Cost structures
Options buyers have to pay an upfront fee, i.e., the premium, to the seller upon purchase. A futures contract allows you to open a position without paying any upfront fee. Importantly, you will likely have to pay some commissions including trading fees and funding rates for crypto futures depending on the exchange.
Time decay
Time decay refers to the decline in the value of an options contract as it nears the date of expiration. The time decay accelerates as the expiration date of a contract draws closer as there's less time to realize a profit. In the case of futures, the passage of time doesn’t adversely affect the valuation of the contract.
Potential risks
Since options traders have the choice not to exercise their contracts, their loss is constricted to the premium they have to pay for the contract. Buyers benefit as the maximum loss is capped at the fixed premium irrespective of how much the underlying asset moves. In contrast, futures contracts carry liquidation risks as leveraged positions are prone to volatile price swings and may deplete a trader's initial investment with little to no effort. Forced liquidation may happen when your wallet balance is unable to meet the margin requirements of your open position. These contracts are riskier because there’s no way to evaluate how much you’ll make or lose, which makes it challenging to hedge your risks.
In summary, the main difference between Binance Options and Binance Futures is the type of derivative product they offer and the level of flexibility and customization they provide to traders.
Hedging with Binance Options
One of the advantages of Binance Options is that it can be used as a hedging tool. Hedging is a risk management strategy that involves taking a position in a financial instrument that is opposite to an existing position to reduce or eliminate the risk of losses.
For example, if a trader holds a long position in a cryptocurrency and is concerned about potential price drops, they can buy a put option on Binance Options. A put option gives the trader the right to sell the underlying asset at a predetermined price (strike price) at a future date (expiration date). If the price of the asset drops below the strike price, the trader can exercise the option and sell the asset at the higher strike price, thus limiting their losses.
Similarly, if a trader holds a short position in a cryptocurrency and is concerned about potential price increases, they can buy a call option on Binance Options. A call option gives the trader the right to buy the underlying asset at a predetermined price (strike price) at a future date (expiration date). If the price of the asset increases above the strike price, the trader can exercise the option and buy the asset at the lower strike price, thus limiting their losses.
The General Opinion; Binance Options can be a useful tool for traders who want to manage their risks and protect their investments in volatile markets.
The Article is just informing you what other products are available in Binance Exchange, therefore not financial advice do your own research.
Reference:
https://www.binance.com/en/blog/futures/binance-options-understanding-options-prices-421499824684900544
https://www.binance.com/en/blog/futures/crypto-futures-and-options-what-are-the-similarities-and-differences-421499824684902074
https://www.binance.com/en/blog/futures/how-to-hedge-a-long-position-with-a-protective-put-135066415356006112
https://www.binance.com/en/eoptions-data/BTCUSDT
#BinanceTournament #futures #options
What are Binance Options?
How to trade Binance Options
What are the USPs of Binance Options products?
What is the difference between Binance Options and Binance Futures?
Hedging with Binance Options
What are Binance Options?
Options traders deal with different variables than those who trade on the futures and spot markets. Options trading can be intimidating at times, especially to newcomers. The seemingly complex mechanics and dense financial jargon surrounding these financial instruments make options trading out of reach for many retail investors. In addition to the knowledge of the technical aspects of trading, options traders must understand how certain variables affect options’ prices.
How To Trade Binance Options
1. Open a Binance account: You will need to create an account on Binance if you don't already have one by completing verification.
2. Deposit funds: Once your account is created, you will need to deposit funds into your account. You can do this by clicking on the "Deposit" button and selecting your preferred payment method or using Binance P2P easiest method to fund your Binance account. For Example in Tanzania put the Currency TZS, then select a Verified merchant with a yellow tick, and click on "Buy" as seen in the following image 👇
3. Navigate to the options trading platform: Once your account is funded, navigate to the options trading platform. You can do this by clicking on the "Options" tab in the top menu bar.
4. Choose an option: Select the option that you want to trade. You can choose from a variety of options, including Call and Put options.
5. Set your trade parameters: Set your trade parameters, including the expiration date, strike price, and the amount you want to trade.
6. Place your trade: Once you have set your trade parameters, click on the "Buy" or "Sell" button to place your trade.
7. Monitor your trade: After placing your trade, monitor it closely to see how it performs. You may want to set stop-loss orders or take-profit orders to limit your losses or lock in profits.
It's important to note that options trading can be risky, so it's important to do your research and understand the risks involved before trading.
What are the USPs of Binance Options products?
Low fees: Binance offers some of the lowest fees in the industry for options trading, making it an attractive option for traders.
Wide range of options: Binance offers a wide range of options, including European and American style options, as well as a variety of strike prices and expiration dates.
User-friendly platform: Binance's options trading platform is designed to be user-friendly, with intuitive navigation and clear instructions.
Advanced trading tools: Binance offers advanced trading tools such as stop-loss orders, take-profit orders, and margin trading to help traders manage their risks and maximize their profits.
High liquidity: Binance's options market has high liquidity, which means that traders can easily buy and sell options at competitive prices.
Security: Binance has a strong reputation for security, with robust security measures in place to protect users' funds and personal information.
In summary; Binance Options product offers a comprehensive and user-friendly options trading experience with low fees, advanced trading tools, and high liquidity.
What is the difference between Binance Options and Binance Futures
Binance Options is a derivative product that allows traders to buy or sell options contracts, which give them the right (but not the obligation) to buy or sell an underlying asset at a predetermined price and time. Options trading is a more flexible and customizable way of trading than futures, as it allows traders to choose their own strike prices and expiration dates.
On the other hand, Binance Futures is a derivative product that allows traders to buy or sell futures contracts, which are agreements to buy or sell an underlying asset at a predetermined price and time in the future. Futures trading is more standardized than options trading, as the contracts have set expiration dates and contract sizes.
Rights and obligations
One of the primary differences between the two instruments is their method of execution. An options buyer has the choice not to exercise the contract if the market moves against their position. In contrast, a futures contract holder must execute the contract at expiry, regardless of the market conditions.
Cost structures
Options buyers have to pay an upfront fee, i.e., the premium, to the seller upon purchase. A futures contract allows you to open a position without paying any upfront fee. Importantly, you will likely have to pay some commissions including trading fees and funding rates for crypto futures depending on the exchange.
Time decay
Time decay refers to the decline in the value of an options contract as it nears the date of expiration. The time decay accelerates as the expiration date of a contract draws closer as there's less time to realize a profit. In the case of futures, the passage of time doesn’t adversely affect the valuation of the contract.
Potential risks
Since options traders have the choice not to exercise their contracts, their loss is constricted to the premium they have to pay for the contract. Buyers benefit as the maximum loss is capped at the fixed premium irrespective of how much the underlying asset moves. In contrast, futures contracts carry liquidation risks as leveraged positions are prone to volatile price swings and may deplete a trader's initial investment with little to no effort. Forced liquidation may happen when your wallet balance is unable to meet the margin requirements of your open position. These contracts are riskier because there’s no way to evaluate how much you’ll make or lose, which makes it challenging to hedge your risks.
In summary, the main difference between Binance Options and Binance Futures is the type of derivative product they offer and the level of flexibility and customization they provide to traders.
Hedging with Binance Options
One of the advantages of Binance Options is that it can be used as a hedging tool. Hedging is a risk management strategy that involves taking a position in a financial instrument that is opposite to an existing position to reduce or eliminate the risk of losses.
For example, if a trader holds a long position in a cryptocurrency and is concerned about potential price drops, they can buy a put option on Binance Options. A put option gives the trader the right to sell the underlying asset at a predetermined price (strike price) at a future date (expiration date). If the price of the asset drops below the strike price, the trader can exercise the option and sell the asset at the higher strike price, thus limiting their losses.
Similarly, if a trader holds a short position in a cryptocurrency and is concerned about potential price increases, they can buy a call option on Binance Options. A call option gives the trader the right to buy the underlying asset at a predetermined price (strike price) at a future date (expiration date). If the price of the asset increases above the strike price, the trader can exercise the option and buy the asset at the lower strike price, thus limiting their losses.
The General Opinion; Binance Options can be a useful tool for traders who want to manage their risks and protect their investments in volatile markets.
The Article is just informing you what other products are available in Binance Exchange, therefore not financial advice do your own research.
Reference:
https://www.binance.com/en/blog/futures/binance-options-understanding-options-prices-421499824684900544
https://www.binance.com/en/blog/futures/crypto-futures-and-options-what-are-the-similarities-and-differences-421499824684902074
https://www.binance.com/en/blog/futures/how-to-hedge-a-long-position-with-a-protective-put-135066415356006112
https://www.binance.com/en/eoptions-data/BTCUSDT
#BinanceTournament #futures #options
Crypto Futures and Options: How They Compare
Options and futures are derivatives that derive their value from an underlying asset.
Crypto futures are contracts to buy or sell an asset at a set price and date. Traders must fulfill their obligations at expiry. Crypto options are contracts that give traders the right to buy or sell an asset at a set price and date. Traders can choose not to exercise their rights at expiry.
Derivatives are financial instruments that track the value of an underlying asset, such as a cryptocurrency like bitcoin. Derivatives let investors speculate on market prices, hedge risks, and diversify their portfolios.
Options and futures are two types of derivatives that have similar trading principles, but different trading strategies. Here are the key differences between them.
What Are Crypto Futures?
Crypto futures are agreements to buy or sell a specific cryptocurrency at a fixed price and time. Traders must buy or sell the asset at the contract price at expiry. Traders can profit or lose depending on their positions (long or short) and futures price. A long position means expecting a price increase, while a short position means expecting a price decrease. For example, if bitcoin’s current price is $10,000, you can buy (long) or sell (short) a futures contract based on your price prediction.
If you buy this contract and bitcoin’s price rises to $20,000 by expiry, you make $10,000 in profit. But if the price falls to $5,000 by expiry, you lose $5,000. Liquidation happens when you wrongly predict the market and your position is closed. Binance Futures lets traders trade quarterly and perpetual futures contracts. Quarterly futures expire after three months, while perpetual futures have no expiry date.
What Are Crypto Options?
Crypto options are contracts that give traders the option to buy or sell an asset at a fixed price and time. Traders can choose to exercise or not exercise their option at expiry. Crypto options let traders reduce the risk of loss and avoid liquidation that futures entail. Traders pay a fee called the premium to buy an option.
There are two types of options: call and put options. Call options let traders buy an asset on a specific date, while put options let them sell an asset on a specific date.
For example, you buy a call option for bitcoin at $10,000, hoping for a price rise. You pay a premium of $400 for this option. If bitcoin’s price drops to $5,000 by expiry, you can opt not to exercise your option. But you lose the premium of $400 that you paid for the option.
Futures vs. Options
Key Similarities Derivatives Both options and futues contracts are agreements between traders to buy or sell a particular asset at a predetermined price and on a specified date in the future. Crypto options contracts provide the contract holder with the right but not the obligation to buy or sell an asset at a predefined price and date. Both options and futures are derivatives that derive their value from an underlying asset, such as a cryptocurrency like bitcoin. Derivatives let investors speculate on market prices, hedge risks, and diversify their portfolios.
Leverage
Both options and futures allow traders to use leverage, which means borrowing money to increase their exposure and potential returns. Leverage can amplify profits but also losses. Binance Futures and Binance Options offer traders various leverage levels to suit their risk appetite and trading strategy.
Risk
Both options and futures involve risk, but options are generally less risky than futures. Options give traders the flexibility to exercise or not exercise their rights at expiry, while futures oblige traders to fulfill their contracts at expiry. Options also have limited downside risk, as traders can only lose the premium they paid for the option. Futures have unlimited downside risk, as traders can lose more than their initial margin if the market moves against them.
Obligation
The main difference between options and futures is the obligation to buy or sell the underlying asset. Options give traders the right but not the obligation to do so, while futures bind traders to their contracts at expiry.
Premium
Another difference between options and futures is the premium. Options require traders to pay a premium to buy the contract, while futures do not. The premium is determined by various factors, such as the strike price, expiry date, volatility, and interest rate.
Expiration
Another difference between options and futures is the expiration date. Options have a fixed expiration date, while futures can have different expiration dates depending on the type of contract. Quarterly futures expire every three months, while perpetual futures have no expiration date.
Conclusion
Options and futures are two types of derivatives that offer exposure to an underlying asset. They have similar trading fundamentals but different trading strategies. Options give traders more flexibility and less risk than futures, but also require a premium. Futures oblige traders to buy or sell the asset at expiry, but do not require a premium. Both options and futures allow traders to use leverage to increase their potential returns. Traders should understand the benefits and risks of each instrument before trading them on Binance Futures and Binance Options.
#futurestrading #options
Crypto futures are contracts to buy or sell an asset at a set price and date. Traders must fulfill their obligations at expiry. Crypto options are contracts that give traders the right to buy or sell an asset at a set price and date. Traders can choose not to exercise their rights at expiry.
Derivatives are financial instruments that track the value of an underlying asset, such as a cryptocurrency like bitcoin. Derivatives let investors speculate on market prices, hedge risks, and diversify their portfolios.
Options and futures are two types of derivatives that have similar trading principles, but different trading strategies. Here are the key differences between them.
What Are Crypto Futures?
Crypto futures are agreements to buy or sell a specific cryptocurrency at a fixed price and time. Traders must buy or sell the asset at the contract price at expiry. Traders can profit or lose depending on their positions (long or short) and futures price. A long position means expecting a price increase, while a short position means expecting a price decrease. For example, if bitcoin’s current price is $10,000, you can buy (long) or sell (short) a futures contract based on your price prediction.
If you buy this contract and bitcoin’s price rises to $20,000 by expiry, you make $10,000 in profit. But if the price falls to $5,000 by expiry, you lose $5,000. Liquidation happens when you wrongly predict the market and your position is closed. Binance Futures lets traders trade quarterly and perpetual futures contracts. Quarterly futures expire after three months, while perpetual futures have no expiry date.
What Are Crypto Options?
Crypto options are contracts that give traders the option to buy or sell an asset at a fixed price and time. Traders can choose to exercise or not exercise their option at expiry. Crypto options let traders reduce the risk of loss and avoid liquidation that futures entail. Traders pay a fee called the premium to buy an option.
There are two types of options: call and put options. Call options let traders buy an asset on a specific date, while put options let them sell an asset on a specific date.
For example, you buy a call option for bitcoin at $10,000, hoping for a price rise. You pay a premium of $400 for this option. If bitcoin’s price drops to $5,000 by expiry, you can opt not to exercise your option. But you lose the premium of $400 that you paid for the option.
Futures vs. Options
Key Similarities Derivatives Both options and futues contracts are agreements between traders to buy or sell a particular asset at a predetermined price and on a specified date in the future. Crypto options contracts provide the contract holder with the right but not the obligation to buy or sell an asset at a predefined price and date. Both options and futures are derivatives that derive their value from an underlying asset, such as a cryptocurrency like bitcoin. Derivatives let investors speculate on market prices, hedge risks, and diversify their portfolios.
Leverage
Both options and futures allow traders to use leverage, which means borrowing money to increase their exposure and potential returns. Leverage can amplify profits but also losses. Binance Futures and Binance Options offer traders various leverage levels to suit their risk appetite and trading strategy.
Risk
Both options and futures involve risk, but options are generally less risky than futures. Options give traders the flexibility to exercise or not exercise their rights at expiry, while futures oblige traders to fulfill their contracts at expiry. Options also have limited downside risk, as traders can only lose the premium they paid for the option. Futures have unlimited downside risk, as traders can lose more than their initial margin if the market moves against them.
Obligation
The main difference between options and futures is the obligation to buy or sell the underlying asset. Options give traders the right but not the obligation to do so, while futures bind traders to their contracts at expiry.
Premium
Another difference between options and futures is the premium. Options require traders to pay a premium to buy the contract, while futures do not. The premium is determined by various factors, such as the strike price, expiry date, volatility, and interest rate.
Expiration
Another difference between options and futures is the expiration date. Options have a fixed expiration date, while futures can have different expiration dates depending on the type of contract. Quarterly futures expire every three months, while perpetual futures have no expiration date.
Conclusion
Options and futures are two types of derivatives that offer exposure to an underlying asset. They have similar trading fundamentals but different trading strategies. Options give traders more flexibility and less risk than futures, but also require a premium. Futures oblige traders to buy or sell the asset at expiry, but do not require a premium. Both options and futures allow traders to use leverage to increase their potential returns. Traders should understand the benefits and risks of each instrument before trading them on Binance Futures and Binance Options.
#futurestrading #options
June 23 Option Data
31k #BTC #options are about to expire with a Put Call Ratio of 0.73, a max pain point of $27,000 and a notional value of $930 million.
180k #ETH options are about to expire, with a Put Call Ratio of 0.86, a max pain point of $1,750 and a notional value of $340 million.
This week, stimulated by the positive news of #ETF , the market rose sharply, bitcoin led by more than 20%, recently mentioned that the risk of significant market volatility rose, in this week to be fulfilled.
Stimulated by the rise in BTC, the value of BTC option positions rose nearly 50% this week, the current #bitcoin and etherum each major term IV inversion is obvious, now Cross-currency IV Arbitrage is very cost-effective, BTC IV long-term higher than the ETH is not sustainable.
✅✅✅
31k #BTC #options are about to expire with a Put Call Ratio of 0.73, a max pain point of $27,000 and a notional value of $930 million.
180k #ETH options are about to expire, with a Put Call Ratio of 0.86, a max pain point of $1,750 and a notional value of $340 million.
This week, stimulated by the positive news of #ETF , the market rose sharply, bitcoin led by more than 20%, recently mentioned that the risk of significant market volatility rose, in this week to be fulfilled.
Stimulated by the rise in BTC, the value of BTC option positions rose nearly 50% this week, the current #bitcoin and etherum each major term IV inversion is obvious, now Cross-currency IV Arbitrage is very cost-effective, BTC IV long-term higher than the ETH is not sustainable.
✅✅✅
Deribit has achieved a new all-time high in notional open interest, with $16 billion in Bitcoin options and $7.6 billion in ETH options outstanding, totaling $23.6 billion. With an additional $2.2 billion in perpetuals and futures open interest, Deribit has crossed the milestone of $25 billion for the first time, now totaling $25.8 billion.
#BTCto40k #futures #options $BTC $ETH
#BTCto40k #futures #options $BTC $ETH
🛑The Wheel #options strategy
🚀A stable regular interest earning strategy, APR can reach 15-40%
💛Follow me, focus on options and defi💚
🚀A stable regular interest earning strategy, APR can reach 15-40%
💛Follow me, focus on options and defi💚
