Option2Trade

#Beginnersguide #option #OptionTrading #Option2Trade #market_tips
$BTC
$BNB
$ETH
1. What Are Binance Options?
Binance offers European-style options — you can only exercise them at expiration. They are cash-settled, and currently available for Bitcoin (BTC) and some altcoins
2. Prerequisites
Create a Binance account and verify your identity (KYC).
Fund your Futures Wallet with USDT or crypto.
Enable Options Trading from the Derivatives tab.
3. Key Terms You Need to Know
Call Option: Bet the price will go up.
Put Option: Bet the price will go down.
Strike Price: Target price of the asset.
Premium: Fee you pay to buy the option.
Expiry: Time the option ends (e.g., 5 min, 1 hr, 1 day).
4. How to Place a Trade

1. Go to the Binance App or Website.

2. Navigate to Derivatives > Options.
3. Choose the asset (e.g., BTCUSDT).
4. Select:
Call or Put
Strike Price
Expiration Time
5. View the Premium and Max Profit/Loss.
6. Enter the amount and confirm your trade.

5. Monitor and Exit Your Position
You can sell before expiry to take profit or cut losses.
Or let the option expire — Binance will auto-settle.
6. Risks to Keep in Mind
Binance Options have high time decay (lose value fast).
Short-term expiration = high volatility.
You can lose 100% of the premium paid.
7. Tips for Beginners
Start with small amounts.
Use Call options in a bullish market, Puts in a bearish market.
Stick to long options only (don’t sell options as a beginner).
Watch the order book, implied volatility, and BTC price movement.

Hey everyone,
I've previously talked to you about types of option contracts. As a reminder, there are 4 types of contracts:
Buy CallSell CallBuy PutSell Put
In basic terms, these can be called Call (Long) and Put (Short). If you think a product will rise, you buy a Call contract. For you to buy this contract, someone else needs to sell it. That person becomes the Sell Call part of the contract. If you think it'll fall, you buy a Put contract, and again, there needs to be someone selling a Put. To sell Call and Put contracts, you need to hold a certain amount of the spot product. If you have the spot product and want to make money from it, you can use this method. You can see an example of an options trade table here.

To understand this table, let's look at the concepts. First, the left side shows Call contracts, and the right side shows Put contracts. The prices you see in the middle of the table are called Strike prices. This is the agreed price between two parties for contract, not the current price of the product. Expiration Date indicates when the contract ends. Option Premium represents the contract price. The ones marked as At The Money (ATM) show contracts close to the current price.
The gray areas in the top left and bottom right are In The Money (ITM), so their premium will always be higher. What does this mean?
Right now, BTCis at $59,400, and if you want to buy a Call contract at $58,000, the contract will be more expensive because the price is already above the Strike price. For example, when you buy this contract, you'd be $1400 in profit. That's why these contracts increase in price by this profit amount. Let's see what happens when you buy this contract. If BTC is at $80,000 at the end of the contract on December 27, 2024, you'd have the right to buy 1 bitcoin at 58k, making $22,000. As you can see in the table, the 58k contract price is $5,440, your gain is $22k, meaning a net profit of $16,560.
On the Put side, if you buy a contract with a 65k strike price, this bearish contract will be ITM. Because you sold BTC at 65k and the price is 59k. We can say that the 6k profit is directly reflected in the contract price. This price difference is called Intrinsic Value.
Out of The Money (OTM) contracts are those where the strike price is outside the product's price. ETH is currently at $2,660, and if you want to buy a 3k call contract, the price will be much cheaper because the price is far from the contract you're buying. You can see ITM contracts in light gray and OTM ones in dark gray.
By the way, if you've noticed, there are two important factors affecting the contract price. The contract's expiration date and whether the contract is ITM or OTM. Another crucial factor is the contract's delta. To explain with an example, let's say you bought a 62k contract when $BTC was at 60,000, and the price rose to 60,100. There's a $100 increase, if your contract's delta is 0.5, the contract value increases by $50. Delta always starts close to 0 in a call contract and moves towards 1 as the date approaches. In a put contract, it starts close to 0 and goes to -1. Delta always progresses logarithmically. Also, the delta ratio somewhat shows the probability of the price reaching that point. If the delta is 0.25, it can be said that the probability of the price reaching that point is 25%.

So, one of the main questions is how are deltas and contract prices determined? The answer is the Black-Scholes Equation, an option pricing technique first mentioned in the 1973 paper "The Pricing of Options and Corporate Liabilities" by Fischer Black and Myron Scholes. It's the best model made until then and is still used today. They won a Nobel Prize for this paper.
After all this technical information, I'll mention two simple methods for using options and end this post. When trading options, you can use these two models initially according to your trading strategy.

You can trade based on the option contract price. That is, you can buy a 2-4 week contract, determine your thought on the direction the price will go, and trade this as the contract price will increase greatly when there's a movement in that direction. The trade example I showed in my previous post is an example of this.But remember, as the contract date approaches, if it's not ITM, the contract price will decrease even more.As for usage areas, if you have a spot product and think a decline might come, you can create a hedge by buying a put contract. If you open a position in the perp market for this hedge, there will be possibilities like the chance of being stopped out, but there's no such risk in options.Using options directly as a spot product. Let's say you have $10k and you think an uptrend is about to start. Let say $ETH is 2500, you can only buy 4. If you try to split it into other coins, there are other problems. If you take a position from the perpetual market, there are many risks like funding fee, liquidation, being stopped out. Let me explain the situation by making an example directly over the market.If we think ETHwill rise 50% in 2 months, it means it will be $3750. If we buy spot with all our money, we can earn $15k with 50% profit.
The ETH September 27 2600 call contract is $200. If you buy 5, you'll pay $1000. You still have $9000 left. So what happens to these 5 contracts we bought when ETH becomes 3750? 3750-2600=1150. We earn $1150 per contract, $5750 in total. We spent $1000 for the contracts, so the net profit is $4750. When we bought spot, we risked all our money, in options only $1000 was risked and almost the same amount of money was earned. And this is only if it closes on that date at the end of the contract date, if the price reaches there earlier than expected, your contract value may increase even more.

That's all for today, see you in the next post.
#OptionsVsPerp #OptionsTrading #option2trade #MaximizeProfits #Volatility $BNB