Posted 11 months ago | by Ben Armstrong
Binance Adds ETH and XRP Options Contracts to Derivatives Platform
On May 25, the world’s biggest crypto exchange Binance announced the addition of Ethereum and XRP options trading to its derivatives platform. An option gives its holder the right, but not the responsibility to, buy or sell the underlying asset, either in actual, or cash-settled form.
With these options, a kind of derivatives, the contract holder has the right to buy the underlying asset at the mature price without coming with any obligation, which means the contract holder can exit whenever the price went the other way by paying a small fee.
Binance is Building a Mature Market
Binance CEO Changpeng Zhao commented:
“Options contract is a much-anticipated product, allowing the traders and miners to effectively buy insurance on their positions and for speculators to take advantage of the market movements as well.”
Ethereum and XRP options are now available on Binance.com. To access them, Mobile users must update their apps first. Then it will be possible to trade options on the go, or from wherever the trader wants to work.
In addition, the exchange also advised the public of the risks associated with options trading:
“There is no guarantee that your options purchase will execute at a profit after the premium has been deducted. Most options purchases will not be profitable, but a minority will be very profitable.”
A Global Expansion
In the beginning, Binance was launched as a spot crypto trading exchange, but the firm then has started to expand into derivatives trading. The daily trading volume on its futures platform is now reportedly more than BitMEX, which was a market leader in the past.
As the exchange is expanding its presence in global markets, many fiat currencies have been added to tap the local markets over the past few months, including Europe, Asia, and Africa.
Binance invested an undisclosed amount in Tokocrypto, a regulated cryptocurrency exchange in Indonesia in early of this month. It also acquired Coinmarketcap.com for a record $400 million. Overall the market reach that Binance has created is impressive, and it is well placed to help the crypto market grow over the coming years.