Binance Unveils Stock Options Trading

Binance Introduces Stock Options, Bridging Traditional and Crypto Markets

Binance is expanding its financial product offerings by launching Stock Options, a new service designed to integrate traditional market instruments with its crypto-native trading platform. The newly available Stock Options provide physically-settled contracts on U.S.-listed stocks and Exchange Traded Funds (ETFs), empowering users with the right to buy (Call) or sell (Put) underlying shares at a predetermined strike price by a specific expiration date.

As a component of Binance’s expanding suite of TradFi (Traditional Finance) products, Stock Options offer traders a novel avenue to express directional market views, hedge existing equity positions, and manage portfolio risk, all accessible through a single Binance account. The product allows users to capitalize on bullish or bearish sentiments for U.S. stocks and ETFs with a clearly defined risk profile: the maximum loss for option buyers is capped at the premium paid for the contract.

Key Features of Binance Stock Options:

• Product Type: Physically-settled options contracts on U.S.-listed stocks and ETFs.
• Settlement: Involves the physical delivery of the underlying shares, with custody managed by Alpaca on behalf of Binance users.
• Offered Through: Nest Trading Limited (NTL) serves as the Introducing Broker, in partnership with Alpaca Securities LLC, which acts as the U.S. Clearing Broker.
• Direction: The product is designed for long-only positions, allowing users to buy Call or Put options. It does not permit the writing or shorting of options.
• Maximum Loss: For option buyers, the maximum loss is limited to the premium paid for the option.
• Order Type: Only limit orders are accepted.
• Funding: Trading requires a Funding Account, and can also utilize Spot Account and/or Flexible Earn balances.
• Trading Hours: Standard trading hours for most U.S. stock options are from 9:30 AM to 4:00 PM Eastern Time (ET). Certain ETF and ETN options may have extended trading hours, closing at 4:15 PM ET.

For comprehensive details on Stock Options, including contract specifications, pricing, valuation, expiration, settlement, position limits, and risk management strategies, users are encouraged to consult the Frequently Asked Questions (FAQ) section.

Navigating Stock Options Trading:

1. Access Options: Navigate to the Stock kline page and select the “Options” tab, located between the “Overview” and “Financials” sections.
2. Select Contract Details: Choose the desired expiration date and strike price from the available options chain.
3. Monitor Positions: Track open positions on the Stock Trading Page or within the Funding Account. Detailed information, including Profit and Loss (PnL) and Greeks, is available in the Position Details.

The FAQ provides complete guidance for users looking to begin trading Stock Options.

Trading activities for Stock Options align with U.S. options market hours, which may differ based on the specific product and exchange.

• U.S. Stock Options: Regular trading hours are 9:30 AM to 4:00 PM ET.
• Certain ETF and ETN Options: Some ETF and ETN options are subject to late-close exceptions and may trade until 4:15 PM ET.

During Non-Trading Hours:

• New orders cannot be placed.
• Existing open orders remain active on the order book.
• Users have the ability to cancel open orders.
• Order matching will only occur when the market reopens.

Trading may also be impacted by U.S. market holidays, early closures, trading halts, or other exchange-specific events. Users should refer to the trading interface for the current market status applicable to each option.

Stock Options are financial contracts that grant the holder the right, but not the obligation, to buy or sell an underlying security at a specified price on or before a set expiration date. This right is acquired by paying a premium. It is important to note that Stock Options do not confer ownership of the underlying securities. Options can be exercised at any time prior to the cut-off time on the relevant expiration date. Users are solely responsible for monitoring their open Stock Option positions and deciding whether to exercise them. To exercise a Stock Option, an exercise instruction must be submitted through the Binance Platform. Failure to submit an exercise instruction before the cut-off time will result in the auto-liquidation of the position, where it will be sold on a best-efforts basis before the close of trading. It is possible for a Stock Option to expire worthless, resulting in the loss of the entire premium paid. Even if a Stock Option is in-the-money at expiration, it will not be automatically exercised unless an explicit exercise instruction has been submitted by the user.