Binance Rolls Out European-style Bitcoin Options Contract

Binance expands its crypto derivatives offering with the launch of its European-style Bitcoin (BTC) options contracts. The new offering will now help investors take the best out from volatility, hedge risk, and discover prices through vanilla options that usually include simple features. As per the announcement, the new options contract will be priced and settled in Tether (USDT).

Binance Rolls Out European-style Bitcoin Options

The launch of the latest BTC options contract is followed by the successful testnet trial carried out back last month. The new Bitcoin options trading will follow European-style options that are exercised only at the expiration date of the option.

Changpeng Zhao (CZ), CEO and founder of Binance, said:

“The crypto industry’s growth is in good part attributable to a combination of factors, including wider public education and institutional interest, innovations in DeFi protocols and smart contracts, and development of a robust derivatives market. Binance will continue to play a leading role in creating useful products for the community.”

Binance believes that American-style options will be able to execute at any time, often resulting in a higher premium. Meanwhile, in comparison, the pricing of the European-style options could be lower. Although, some users find the European-style options to be more suitable, based on their needs and trading strategies.

Growing Demand for BTC Options Market

Binance indicated that the growing demand for BTC options is the reason behind launching the new offering. The exchange initially rolled out its Bitcoin options trading by launching American-style BTC options contracts in April 2020. The key difference between the American and European-style is that in the case of the European format, traders will only be able to exercise at the expiration of the contract.

The latest options settlement in Tether (USDT) comes at a time when both bitcoin and the bitcoin derivatives market are surging. Currently, Bitcoin is trading around $27,000 levels. Meanwhile, in December, Bitcoin options crossed $1 billion for the first time with total open interest almost reaching the $6 billion mark.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Binance Rolls Out European-style Bitcoin Options Contract

Jafrin Ahmed

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.