453 dollars 334. 183 dollars what do these numbers even mean and how to trade options on a Binance? I will show you step by step how you can read Binance options, and then I will show you click by click how you can trade options on Binance.
Special Campaigns and Trading Bonuses on Binance
Binance now also has a special campaign for option traders and for people who are making money by copying and pasting links. I will show you the details of that in a moment. But when you want to start making money on Binance using any method, you will need to have an account. With this one, it’s free. Now, I will leave a link in the description where you can get up to six hundred dollars worth of trading bonuses.
Creating Your Free Binance Account
you will land on Binance’s registration page, where you will create your free account using your phone number, email address, Google account, or Apple ID. For example, with the phone number, it’s really easy. You type in your country, for example, India, put your phone number right here, and create a strong password. Then you will tap this box right here, and my referral ID with the best bonus will be automatically added. You click here to create a personal account, and you will be inside Binance for free.
Redeeming Your Welcome Bonuses on Binance
Once you’re inside Binance and you want to redeem your welcome bonuses, you will come right here to the Task Center and Reward Center. I will show you the details in this video. How to create a Binance account tutorial is on my playlist “Earn Money on Binance”. But today, I will show you the options trading that you can find here in the derivative section. It says buy and sell European-style options. What does it mean? It means that options are only executed on their expiration date, and that’s why it’s European style. I will explain to you a little bit about what options trading means, how you can read these numbers, and how you can eventually open a trade.
Understanding Call and Put Options on Binance
After all that, I will tell you about the special campaign for option traders and people who make money by copying and pasting links on Binance. You can see here on the left-hand side there are calls, and on the right-hand side there are puts. What does it mean? A call is the right to buy, and that’s why it’s called an option because you are not obligated to buy.You are getting an option, a right to buy on a specific date that you will always see there. A put is a right to sell or an option to sell. At the moment, you can see there is an Ethereum USDT trading pair, but I’m pretty sure they will be adding many other trading pairs as well, such as BTC USDT and others. So by the time you are watching this, there may already be more trading pairs available. Make sure that you check it out yourself.
Why Binance is a Reliable Platform for Options Trading
Before I show you what the bid, mark, and ask prices even mean here and how you can set up your order, I want to mention why I like Binance. First of all, it’s ultra-reliable. You can see that every single day billions and billions of dollars are being traded on Binance, so Binance options is one of the most reliable options trading platforms in the universe. Second, they also provide special promotional bonuses and campaigns for options traders, so you can earn even more money. Third, you have everything on one platform. On other platforms, you may only have option trading. On Binance, you can do it all. Let me just quickly show you. Here on the earn section, you will make money automatically, even while you are sleeping. Here on the derivatives section, you can do options trading. On the trade section, you can do spot trading, margin trading, strategy trading, and you can use a trading bot. They also have peer-to-peer trading. That’s why I like Binance. You don’t need many platforms to do different things because you can already do so many things inside Binance.
Setting Up Your Binance Derivatives Account
The first thing you need to do when you want to start options trading is, of course, to open a derivatives account. If you don’t have one already, it will ask you for a referral code, and when you put in the code SN10, it gives you a 10% discount on your trading fees. Once you have done that and you have answered the quiz, you have a derivatives account. You will be able to transfer money to your options account by clicking right here and transferring money, for example, from your spot wallet to your options wallet. Let me transfer 98 dollars. You can see, confirm, and transfer has been successful. Now we have around 100 USDT in the options account. You will find it here on the wallet and then options section. You can see that now I have this 98 USDT. You can transfer more if you want or transfer back from options to Fiat and spot. At the moment, they are only supporting USDT for these options trades, so they are cash-settled, but in the future, there may also be USD available and other currencies, so stay tuned for updates and upgrades on this platform.
Navigating Binance Options Trading Interface
So let’s start going step by step through this platform on how you will be able to read it. The first one is, of course, the trading pair, in this case, Ethereum USDT. Then there is the current price. You can also check the same current price on CoinMarketCap or any other source because Binance has great liquidity. Here you will see the expiry date, so when this contract will expire. When you click on the left-hand side, you will see call options where you will be able to buy a right to buy. With these ones, you will be able to buy a right to sell. When you come here the first time, it provides you with a tutorial video. When you click any of these, you will be able to trade them on the right-hand side. Here you will see the bid price, mark, and ask price.
Understanding Premium Prices in Options Trading
Now you are probably wondering what these mean.
With options trading, there is a thing called a premium, which is the price you pay when you buy one of these contracts.
Now you’re probably wondering how the price of the premium is defined.
Let me explain with a simple example.
At the moment, the price of Ethereum is 1326 USD, and if you want to get the right to buy Ethereum at 900 USDT, you need to pay for that because the difference between this number and the current market price is around 426 dollars.
So if you would immediately get a right to buy for this price, the value would be 426.
It shows right here.
However, this one is not the difference between these two.
In this example, it just happens to be the same, but as you can see in other examples, it’s different.
Criteria for Premium Prices in Options Trading
| Criteria | Explanation |
|---|---|
| Difference between the strike price and the current market price | This is the first criterion for the premium. The bigger the difference, the bigger the premium. |
| How long in the future the expiry date is | This is the second criterion. The longer the expiry date, the higher the price you need to pay due to increased chances of reaching the prices. |
| Premium pricing factors | The premium is influenced by both the difference towards the strike price and the expiry date of the contract. |
| Short expiry and small difference | If the difference between the strike price and the current market price is small and the expiry date is short, then the price will be shorter. |
Executing and Profiting from Options Contracts
When you buy one of these contracts, you pay the premium and get the contract. You can either execute it yourself on the expiry date or sell it to somebody else and earn a profit. Let’s choose one of these options, for example, a 1000 strike price. Here on the right-hand side, you will always be able to check that it’s the correct one. Make sure you take a look. It’s Ethereum USDT, the expiry date, and the strike price is 1000. You can see 1000, and then it’s a call option. If you choose this one, it’s a put option. You can see 1100. You can always double-check that it’s 100% correct. You can see the details for all these contracts by clicking right here. You can see the candlestick charts. When you click that one, it opens a complete view. Now it’s for one specific contract. You can choose any different contract as well. You will also see the order books right here.
Using Binance’s Built-in Help and Tutorials
When we go back, we will be back into this view. It also shows explanations for all the things. Whenever you go to Binance, if there is something you don’t understand, simply hover your mouse over it. For example, this one shows the best bid price or the highest buy price currently in the order book. The mark shows the theoretical options fair price based on the Black-Scholes model, which is a mathematical equation that calculates the theoretical fair price. It’s usually used for options trading. Here is the best ask price, the lowest sell price currently in the order book. You will notice a difference between these two.
Placing Orders and Managing Trades on Binance
To help you understand this better, I will show you one chart. You can open long and close. Opening is basically buying; closing is selling. Then you can also do limit orders and BBO, which is kind of like a market or best bid offer. It’s just