Let’s break it down. On Binance, “short selling” options means you’re selling a new options contract to another trader. You don’t need to hold a long position in advance. In traditional finance, this is called “writing an option”. You’re taking the seller’s side of the trade, and in exchange for taking on that risk, you are compensated with the option’s premium up front. That premium is your potential profit.
Real-World Example
Let’s say BTC is trading at $100,000. You decide to sell a call option — a contract that gives someone the right to buy BTC from you at a set price (called the strike price) within a certain timeframe. The call option you sell has a strike price of $105,000 and expires in 7 days. The buyer pays you $800 USDT for the option. That’s the premium, and you keep it no matter what. Now, two things can happen:
At expiry, the BTC settlement price is below $105,000. The option is not exercised and expires worthless. Your profit on the trade is $800, excluding any applicable transaction fees.
At expiry, the BTC settlement price is above $105,000 — let’s say it’s at $108,000. The option is exercised at $105K. Your profit on the trade is calculated as $800 minus the settlement difference, as well as any applicable transaction and exercise fees.
The bottom line: you’re getting paid for taking on the risk. If BTC doesn’t move much — or doesn’t move in the buyer’s favour — you keep the premium as profit. This kind of strategy has been used by institutions for years. Now, thanks to Binance’s new feature, any Options user can do it too, with just a few clicks and competitive fees at launch.
Follow for more @Ishaq Houth