Risk Warning:Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
- Multiple deposit methods and currencies
- Expiration dates of the contract is up to 150 days
- Support 11 languages
- A Mobile app is available
- friendly interface
- Largest options instruments offerings
- European contract types
- No American contract types
Table of contents
7 minutes
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OKEx Exchange is a world-leading cryptocurrency exchange, providing advanced financial services to traders globally by using blockchain technology.
The exchange, provides hundreds of cryptocurrencies, futures trading pairs and options to help traders to optimize their strategy. Okex is one of the top 10 digital asset derivative exchanges by trading volume according to Coinmarketcap , serving millions of users in over 100 countries. As of January 2021 the derivative trade volume was over $6.6 Billion of daily volume. OKex was one of the first exchanges to add Bitcoin options to their platform back in 2019.
Okex Options Offering:
Options give contract holder the right to buy or sell an underlying asset on a fixed day in the future. The contract holder (buyer) can choose to exercise the option if she or he can benefit from doing so. The contract writer (seller) will have to pay a relevant amount to the contract hold If there is no benefit from exercising, the buyer can choose not to exercise it. The seller does not need to pay anything in this case.
Options Contract
Moreover the Options Contract, are settled in BTC, ETH, EOS and other cryptocurrencies. Each contract’s face value of BTC/USD, ETH/USD and EOS /USD options are 0.1 BTC, 1 ETH and 100 EOS respectively. Investor can pay option premium to buy call or put options in order to lock in the prices for buying or selling the underlying asset upon the expiry of the options contract. You can also short options contract to earn options premium immediately. In such case, you have the obligation to buy or sell the agreed number of the underlying assets at fixed prices upon expiry. Prior to expiry, both the buyer and the seller can close the open positions and free their rights and obligations in advance.
Basics of options:
Underlying asset
The underlying asset for trading on which derivatives contract’s price is based, including commodities, financial assets, interest rates and composite indices. For example, the underlying asset of Bitcoin options is BTC/USD index., Ethereum options is ETH/USD index and the underlying asset of EOS options is EOS/USD index.
Expiration date:
the date on which the option expires.
Exercise price (or strike price):
the price at which the option holder can buy or sell an underlying asset when exercising a call or put option respectively.
Contract Types:
options are categorized into different styles. They can be classified into European, American and vanilla options given their exercise styles.
Option premium:
the price at which an option is bought or sold.
Okex options are following the European Option meaning it can only be exercised on its expiration date.
Options can be classified into in-the-money (ITM), at-the-money (ATM) and out-of-the-money (OTM), depending on the difference between the strike price and the price of the underlying asset.
Both the option buyer and seller can choose to close their open position(s) prior to or upon the expiration date.
Options Walkthrough
In order to trade on options with OKEx you first you need to select if you want to speculate for the crypto to go ‘’rise’’ or to ‘’fall’’
You then have an opportunity to select a exercise date that compliment your trading strategy:
- 22h
- 2 days
- 3 days
- 10 days
- 31 days
- 59 days
- 150 days
Upon selection of the exercise date, you will be offered three different strike prices for your options with three different premium costs:
- Low risk- option strike price will be closest to current price of the underlying asset-therefore paying the highest premium fees
- Medium risk- option strike price, will be slightly further from the current price of the underlying asset, therefore the premium fees with be slightly higher
- High risk – option strike price will be the furthest from the current price of the underlying asset, therefore paying the lowest premium fees which has the furthest
Basic of OKex Options:
Example:
Take Call Options Contract BTCUSD-190927-6000-C as an example. The name implies that the underlying of the contract is BTC/USD index, the contract expiry time 08:00 Sep 27, 2019 (UTC), exercise price 6000 USD. If the price of BTC/USD index is 9000 USD, higher than 6000 USD upon expiry, the option holder can receive a payment of [(final settlement price – 6000) / (final settlement price) x contract multiplier] = [(9000-6000)/9000] x 0.1= 0.033 BTC. However, if the price of BTC/USD index is lower than or equal to 6000 USD upon expiry, the holder will not receive a payment. Same goes for ETH/USD and other index options.
The differences between OKEx options and futures:
Different rights and obligations
When trading futures, both the buyer and the seller are obliged to settle a futures contract.
For options, the buyer has the right, but not the obligation, to buy or sell the underlying asset after paying the premium.
Margin requirements
When trading futures, both the buyer and the seller have to pay a margin deposit to open a position.
For options, only the buyer pays a premium, but no margin. Only the option contract seller has to pay a margin.
Potential risks
When trading futures, the potential gains or losses for both buyers and the sellers are unlimited.
For options, the potential gain from buying an option contract is unlimited, but the loss of a buyer is only limited to the premium paid. However, the potential loss of selling an option is unlimited, but the profit of selling is limited to the premium received.
OKEX Tutorial
Features of OKEx Options:
Settled with cryptoassets:
The options contracts are settled in cryptoassets instead of fiat currencies.
Broad offerings:
OKEx offers options with a lot of different expiration dates and exercise prices for users to choose from.
Transparent price discovery system:
Warrant products that only allow buyers to purchase at sellers' set prices. We allow both options contract buyers and sellers to quotes freely
Robust anti-manipulation system:
OKEx has designed a robust anti-manipulation system to prevent price manipulations. OKEx takes a fair reference of the overall market data to determine a fair mark price which is used to calculate users' position value and P&Ls. They use this mark price to calculate account margins and manage platform risk so as to minimize liquidation risks.
Sophisticated risk management system:
Okex formulate smart margin calculation and partial liquidation procedures according to a robust and intelligent risk management algorithm. Seller leverage allows investors not to pay full margins, thus increasing their utilization
Okex Options fees:
Options Exercise Fees
- Upon exercising your options, you will incur an exercise fee rate is 0.02% which is not determined by users' tiers. The exercise fee rate for a single options contract will not exceed 12.5%
of the exercise income. - One-day and two-day options are exempt from the exercise fee.
Partial Liquidation and Liquidation
The options partial liquidation fee is charged according to the user's tier and the maker/taker rate. The options liquidation fee is based on the Lv1 taker fee. To learn more about partial liquidation and liquidation in options trading, please refer to the “Options Guide”.
During partial liquidation, a penalty fee will be charged only on short positions. The fee rate is fixed at 0.2% and not affected by the user's tier. The penalty fee will be injected into the insurance fund at the time of settlement.
The partial liquidation fee and liquidation fee will not exceed 12.5%
Conclusion
From all perspectives, we truly like OKEx. We love the interface perspective as it makes figuring out how to trade options a lot simpler. We have gone over different exchanges that offer something comparable, yet we need to concede the OKEx trade makes it such a great amount of simpler to really trade options with no issue.
