Binance, the world's largest cryptocurrency exchange by trading volume, has just announced the launch of "European-style" Vanilla Bitcoin Options contracts, according to a press release shared with iHodl.
The options, which are priced and settled in USDT, offer users a wide variety of options to diversify their portfolio and manage their market exposure. Users can both buy the options for hedging and trading, as well as write and sell options as an issuer.
The launch of this product comes after the completion of a testnet trial in November 2020 which gathered public feedback in order to further enhance user experience, such as the optimization of margin and risk control mechanisms.
Due to the increase of institutional demand and advancements in crypto infrastructure, there is an increasing need for quality hedging and liquidity products. According to market data, the trading volume of BTC options exceeded $1B for the first time in December. As a comparison, the maximum daily trading volume of options in Q1/2020 was $180M.
European-style options can only be exercised by the option holder at the contract’s expiration date. Remember that Binance first launched American-style options back in April 2020, which can be exercised at any time up till expiration.
With this new addition, users have access to both styles of options, which allows them to better manage their portfolio according to their trading strategies.
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