Binance Review – Bitcoin Options Edition
ProsPositive aspects of the game
- Low transaction cost
- Settlement in stablecoin
- Wide range of available assets
- friendly interface
- Easy to use
ConsThe disadvantages we highlight
- European options only
- KYC Is required
- Binance overview and background
- Binance Options trading basics
- Binance Options' key features
- Low capital requirement
- User-friendly interface
- Available trading assets
- Tailored strategies
- Stablecoin settlement
- Flexible listing cycle
- Sophisticated education materials
- Why Trade Binance Crypto Options?
- Binance Options trading cost
- Is Binance safe for Options trading?
- Binance exchange Options alternatives
The increasing interest in crypto-derivative offerings from both retail and institutional investors has spurred a demand for more advanced financial instruments. The innovative Options Platform has emerged as a cost-effective response to this demand. This platform allows traders to hedge their portfolios against market volatility or express their market perspectives at a predetermined cost, the Options premium.
Several companies have taken a remarkable step in options trading, and Binance is one of them. In today's review, we will see the details of Binance options trading, which might help you decide whether you should trade here or not.
Binance overview and background
Binance functions as a leading international cryptocurrency exchange. It offers a variety of trading systems and services, but the cryptocurrency market is its primary focus.
In its first year of operation, Binance, founded in July 2017 and headquartered in Hong Kong, rose rapidly to become one of the largest cryptocurrency exchanges globally. Recognised for its highly efficient services and sophisticated trading instruments, the company consolidated its position as a market leader.
Binance consistently ranks first in terms of trading volume, with a reputation for facilitating high-volume trades and being a reputable exchange within the cryptocurrency industry.
In June 2018, Binance moved significantly in cryptocurrency by acquiring Trust Wallet. In 2019, a significant security lapse led to the theft of 7,000 Bitcoins ($40 million) from the exchange. Despite momentarily suspending dollar deposits and withdrawals, Binance reimbursed affected users from its secured asset fund.
In 2020, Binance relocated its headquarters to Malta in response to regulatory challenges in China and Hong Kong. It expanded its global reach by establishing enterprises in Singapore, Indonesia, and Jersey and registered offices in several European nations, including Gibraltar and Estonia.
Additionally, Binance adapted to country-specific licensing requirements applicable to all trading segments, including options.
Binance Options trading basics
Crypto Options trading is a contract to provides holders the right but not the obligation to sell or buy a crypto asset.
Options trading in the crypto market has become popular as it needs a smaller margin than being involved in the crypto futures. This is because Options trading does not involve the contract directly.
An Options contract's value comes from the following asset's strike price. This value is known as premium and depends on factors like the Options value or the price change.
Before joining the Options market, understanding the basics of the strike price, premium, and expiration date is crucial. Moreover, the primary option is another term that a trader should know. For example, the American Options can be exercised before the expiration date, while the European Options must be exercised at the expiration date.
In Binance, Options trading is limited to the European style, merged and settled in USDC. Also, investors can trade Options beyond the BTC and ETH markets.
Binance Options' key features
If you want to step into the Binance Options trading, you might find this section helpful, as we will cover key observations based on our research.
Low capital requirement
One of the best features of Binance options is that traders can join in this field with a lower capital requirement. You can pay the required options premium for the same exposure, like holding futures or spot positions.
In Binance options trading, users can participate in trading without any hassle. The intuitive user-focused interface, with the opportunity of API connectivity, could be an effective way to switch between accounts.
Moreover, the platform made the list of assets easy for traders to easily check the list of assets based on different expiry dates.
Available trading assets
A wide range of trading assets is seen in the Binance options trading, which indicates an industry leader. While most platforms stick to BTC and ETH options, Binance expanded its presence beyond it.
Here is the list of available assets on Binance options trading-
Binane claims themselves as an industry leader in crypto trading as it provides an extensive trading opportunity in every section.
During our review, we found that options trading as sophisticated as several functions like strike prices, expiry dates, and options types could help traders define the market direction.
Moreover, the easy options, options data, Bvol index, and calculation could be important tools provided by the platform.
Binance options trading are prices in USDT, which is a popular stablecoin. As this coin's value is pegged to the US Dollar, users can eliminate the unusual market fluctuation, which is very common in cryptos.
Flexible listing cycle
As discussed in the above section, Binance uses European options trading, where the settlement takes place daily, weekly, monthly and quarterly.
As a result, short-term and long-term traders can both take part in Binance options trading in the wide range of available assets.
Sophisticated education materials
Under the Binance support centre, a comprehensive guide on options trading is available, starting from basics to advanced. Our review found 15+ blog content specified on options trading, which a trader can use as a strong learning source.
Why Trade Binance Crypto Options?
There could be many reasons to take part in Binance options trading, but the following will be majors:
Binance Options can shield your portfolio from market fluctuations. Consider purchasing Put Options to safeguard your holdings and mitigate potential losses if you are a long-term investor who is concerned about market volatility.
Binance Options restrict your potential losses to the Options Premium, thereby defining your adverse risk. In the meantime, the profit potential of Call Options remains unrestricted.
Option prices are influenced by the underlying asset's price movement and other factors, such as volatility and time value. This enables you to establish positions based not only on price movements but also on volatility tendencies.
Binance Options trading cost
In Binance Options trading, trades should pay two different fees- transaction fee and exercise fee.
The transaction fee is applicable as soon as a trader opens or closes a position. The rate of this fee depends on the asset's spot price index at the time the order is completed.
As per our findings, Binance charges 0.03% as a transaction fee.
An exercise fee is applicable as soon as an option is exercised. This fee rate is calculated based on the settlement price of the particular asset at a specific time.
As per our findings, the Binance Exercise fee rate is 0.015%.
Is Binance safe for Options trading?
When entrusting your funds to a cryptocurrency exchange, security is of the utmost importance, especially in light of the numerous cybercrime incidents that have occurred over the years.
The daily volume of cash and coin transactions handled by Binance Exchange makes it a frequent target of hacker attempts. However, Binance is committed to combating such illegal activities and takes proactive measures, such as temporarily suspending its services, to protect the assets of its users.
Here are the key takeaways regarding funds safety in Binance-
- Offline cold storage: Most users' funds are stored offline in cold storage, reducing vulnerability to online attacks.
- Insurance fund: Binance has established its own insurance fund, which is financed by allocating 10% of all trading fees. While not equivalent to third-party insurance, this fund provides additional protection for hacking-related losses.
- User-Level Security: Two-factor authentication and withdrawal address whitelisting are user-level security features provided by Binance. Two-factor authentication increases account security by requiring users to supply two verification forms before account access. Whitelisting withdrawal addresses enables users to restrict withdrawals to pre-approved addresses, thereby enhancing the control and security of their transactions.
Binance exchange Options alternatives
Through its user-friendly interface, Binance Options endeavors to ease Options trading. The robust liquidity found on Binance extends to our innovative Options Platform, ensuring that buy/sell orders are executed with minimal slippage. Binance makes Options trading more accessible to retail and institutional traders with a lower fee and offers some of the market's most competitive Options trading fees.
Overall, we have found this platform to be legit and trustworthy, but traders are requested to research it a bit before investing money.