What Are Options?
Options are financial contracts that grant the buyer the right—but not the obligation—to buy (call option) or sell (put option) an underlying asset at a predetermined price (strike price) by a specified date (expiration date).
👉 Explore crypto options trading
Key Components of Options:
- Underlying Asset: The security or commodity tied to the option (e.g., BTC, ETH).
- Expiration Date: The deadline to exercise the option.
- Strike Price: The fixed price at which the asset can be bought/sold.
- Premium: The cost paid to purchase the option.
Styles:
- European: Exercisable only at expiration (OKX uses European-style options).
- American: Exercisable any time before expiration.
How Options Work:
- Buyers: Pay a premium for potential profit (limited risk).
- Sellers: Collect premiums but assume obligation if exercised (higher risk).
OKX Options Contracts
OKX offers BTC and ETH options settled in crypto, with:
- Contract Size: 0.1 BTC or 1 ETH per contract.
- Flexible Strategies: Buy/sell calls/puts to hedge or speculate.
Example: BTCUSD-20250927-6000-C = Call option expiring Sept 27, 2025, strike $6,000.
Unique Features:
✅ Crypto Settlement: No fiat required.
✅ Transparent Pricing: Market-driven bids/asks.
✅ Anti-Manipulation: Multi-exchange price averaging for fair settlement.
Trading Rules & Strategies
Steps to Trade:
- Place Orders: Select strike/expiration; lock margin (sellers).
- Execution: Buyers profit if in-the-money at expiry; sellers must fulfill obligations.
- Settlement: Auto-exercised for ITM options; positions closed post-expiry.
Advantages of Options:
- Leverage: Control large positions with small capital.
- Risk Management: Cap losses (buyers) or earn premiums (sellers).
- Strategic Diversity: Combine calls/puts for custom risk/reward profiles.
FAQs
1. Can I trade options on OKX without KYC?
Yes, but withdrawals require identity verification.
2. What’s the minimum investment for OKX options?
Depends on the contract size (e.g., ~0.1 BTC per contract).
3. How does OKX prevent price manipulation?
By using aggregated prices from multiple exchanges for settlement.
4. What happens if my option expires out-of-the-money?
It becomes worthless; buyers lose the premium, sellers keep it.
5. Are options riskier than spot trading?
For sellers, yes (unlimited risk); buyers risk only the premium.
6. Can I close options before expiration?
Yes, trade out of positions anytime in the secondary market.
Mastering options on OKX empowers traders with advanced hedging and profit opportunities. Dive in with informed strategies! 🚀