Binance said on Oct. 15 that it has expanded its stock options offering with two new strategies: Covered Call and Cash-Secured Put. The update allows users to sell options contracts and collect premiums after posting the required collateral. Under the Covered Call structure, users must hold the underlying stock as collateral and, if the option is exercised, sell the stock at the agreed strike price. For the Cash-Secured Put strategy, users must lock a sufficient amount of USDC and, if exercised, buy the underlying stock at the strike price. Binance said both strategies use physical settlement, with collateral remaining frozen until the position is closed, the option expires, or the contract is exercised. The exchange also said the product currently supports limit orders only. It added that access to the product may be unavailable in some regions because of local restrictions.
Binance said on Oct. 15 that it has expanded its stock options product by introducing two strategies, Covered Call and Cash-Secured Put, allowing users to sell options contracts and collect premiums after posting the required collateral.
How the two strategies work
Under the Covered Call strategy, users must hold the underlying stock as collateral. If the option is exercised, they are required to sell the stock at the agreed strike price.
Under the Cash-Secured Put strategy, users must lock a sufficient amount of USDC as collateral. If the option is exercised, they must buy the underlying stock at the strike price.
Settlement and order type
Binance said both strategies use physical settlement. The collateral assets remain frozen until the position is closed, the option expires, or the contract is exercised.
The product currently supports limit orders only. Binance also said the Cash-Secured Put strategy uses USDC as collateral.
Regional availability
The exchange added that the related products may be unavailable in certain regions due to local restrictions.
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