What is Binance Options? [Hướng dẫn giao dịch quyền chọn từ A-Z]

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2021-03-23 01:49:53

What is Binance Options?

Binance Options is part of the ecosystem of Binance. It allows you to transact option contract American Option.

You can make a profit by predicting the price to go up or down over a given period of time.

On what devices can Binance Options be used?

Currently, you can use Binance Options on Android and iOS devices through the Binance app.

Things to know before trading options on Binance

  • CALL: Call option (you will gain profit when the price of Bitcoin increases).
  • PUT: Put call (you will gain profit when the price of Bitcoin falls).
  • Premium: The amount you pay to buy the options contract is also known as the option fee.
  • Strike Price: The price at which you buy the option contract, also known as the strike price.
  • Close Price: Also known as Settlement Price. This is the exercise price of the option.
  • Expiry Date: Contract period will expire.
  • Breakeven Price: The price you will break even.

How are profits and risks on Binance Options calculated?

Compared to binary options products, Binance Options has many similarities because of its short-term support.

But Binance argues that they are not the same as binary options because Binance Options does not have a fixed payment structure.

For Binance Options, your profits will not be limited. The only risk is the option fee.

Buy Call

When you do Buy Call ie you are expecting a price higher than the current one. You will be profitable if it follows your expectations.

Suppose you Buy Call 1 BTC frame size 8 hours (8H), strike price (Strike Price) is 9900 USDT with the option fee (Premium) is 140 USDT (you expect the BTC price to go up within 8 hours).

Then the breakeven price will be 9900 + 140 = 10040 USDT. This means that when BTC goes up to 10040 USDT you will have no more losses.

If BTC exceeds 10040 USDT and goes up to 12000, you will get 11000-10040 = 960 USDT.

Where Bitcoin does not go up as you expected or even go below the price you call (Strike Price) you lose the option fee of 140 USDT.

Call Option's profit and risk structure
Source: Binance

Buy Put

When you do Buy Put that is, you predict that Bitcoin will fall. You will be profitable if it goes according to your prediction.

Suppose you Buy Put size 1 BTC time frame 1 hour (1H), strike price is 9900 USDT with option fee of 40 USDT (you predict the price will drop within 1 hour).

Then the breakeven price will be 9900-40 = 9860 USDT. You will break even and make a profit when the Bitcoin price falls below 9860 USDT.

If Bitcoin is not falling as you predicted then your loss is 40 USDT corresponding to the option fee.

Put Option's profit and risk structure
Source: Binance

A guide to using Options on Binance

1- Download the Binance App

You must first have an account of the exchange and download the Binance App because options are currently only available on mobile devices.

If you do not have an account, watch now registration guide for Binance exchange.

2- Open a Binance Futures account

Binance Options and Binance Futures accounts “2 but 1”. So to trade options you have to open a Futures account.

Watch Now: What is Binance Futures? Instructions for complete use from AZ

To open a Futures account, first go to Funds -> Select Futures

Open a Futures account on the Binance App

You enter the code “CHK“To support the Virtual Currency Blog as well 10% discount on transaction fees! Finally you tick the box “Guide to Trading Futures“Then press the button Open a Futures account as shown below is done.

Confirm Futures account opening

3. Conducting options contract transactions

Transfer money to Future wallet

Before trading, make sure you have money in your Future wallet. If not, please transfer before the transaction can be made.

To move people to the part Deal choose Selection (Options). Next, you click on the button with an arrow as shown below.

Finally, enter the amount you need to transfer from Spot Wallet to Future wallet and press the button Confirm it’s done.

Transfer money to Futures wallet

Select a due date

You can choose from 10 minutes (10m), 30 minutes (30m), 1 hour (1H), 8 hours (8H), 1 day (1D).

This is the time when you predict it will go up or down. For example, you predict that in 30 minutes the price will fluctuate, then you choose the 30m frame.

Select the option contract expiration time

Choose a contract size

Enter contract size at “SL (BTC)“. The larger the size, the greater the option fee (Premium) the higher you pay.

Note: On higher timeframes the less contract size you can afford. For example, here I have 44 USDT at 10m frame, I can buy up to ~ 2.9 BTC. But in the 1D frame, I can only buy ~ 0.19 BTC.

The option fee depends on the price of BTC as well.

Once you have selected the time frame and size you just need to press the “Buy Call” or “Buy Put” button.

For example, if you predict that the price of BTC will decrease in 1 hour, you choose: 1H and “Buy Put“. On the contrary, if you think it increases then “Buy Call“.

Choose the option contract size

Confirm Buy Call or Put

After pressing the button Buy Call or Buy Put. A message about your option will appear. You check again and then press the button Confirm is done.

Here, me Buy BTC Put 8H with the strike price of 9849 USDT. That means I think within 8 hours the price will be lower than this price.

Note: Currently, the breakeven price is also displayed incorrectly at confirmation of Buy Call or Buy Put. When you are finished buying outside view the Position you will see the break-even price.

Buy Call or Put

After purchasing information about expiration time, as well as breakeven price will be as shown below.

As you can also see my breakeven price here is 9710 USDT. This means that when Bitcoin is priced at 9710, we will not lose any fees.

If the price falls below 9710, I will start to make a profit.

In case of not reducing the price, even increasing the price you make Buy Put, you only lose the option fee (Premium).

Note: You can execute the contract before the due time. For example, if you buy 8H contract but only 4 hours, you have a market profit you can make by pressing the button. Pay in the position area.

Information about long positions called call or buy put

Epilogue

Hope this article helps you to know what Binance Options is! If you feel good, please rate 5 stars, like and share this article to help Virtual currency blog have more motivation!

Good luck!

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