📢 What are options on Binance? 💡
Options on Binance are derivative contracts that give traders the right, but not the obligation, to buy or sell cryptocurrency at a predetermined price before a certain date. Binance allows the option to be exercised at any time before expiration.
🔍 How does it work?
🟢 Call option — the right to buy an asset at a fixed price.
🔴 Put option — the right to sell an asset at a fixed price.
💰 Premium — the amount you pay to acquire the option.
⏳ Expiration date — the period during which the option can be exercised.
✅ Advantages:
📉 Hedging: the ability to protect a portfolio from unfavorable market movements.
🔄 Flexibility: a variety of strategies for different market conditions.
📈 Profit potential: the opportunity to earn from both rising and falling markets.
⚠️ Disadvantages:
⏱ Time decay: the value of the option may decrease as the expiration date approaches.
💹 Premium volatility: the value of the option can fluctuate significantly depending on market conditions.
🔗 Sources:
Binance Academy