An options contract is a type of derivative product that grants the buyer the right—but not the obligation—to buy or sell a specified quantity of an underlying asset at a predetermined strike price on or before a future date. The buyer pays a cost (premium) to acquire this right.
- Buyer's Choice: The contract buyer can choose to exercise the options if profitable, requiring the seller to pay the corresponding amount.
- No Obligation: If exercising offers no advantage, the buyer can opt not to proceed, releasing the seller from any payment.
Key Components of Options Trading
- Underlying Asset: Tradable asset (e.g., BTC/USD index for Bitcoin options) determining the contract price. OKX offers options on Bitcoin and Ethereum.
- Expiration Date: The contract's expiry date.
- Strike Price: Fixed price at which the buyer can purchase (call) or sell (put) the underlying asset.
Contract Type:
- Call Options: Right to buy at a set price.
- Put Options: Right to sell at a set price.
Exercise Style:
- American: Can be exercised anytime before expiration.
- European: Only exercisable at expiration (OKX uses European-style options).
- Options Premium: Price paid/received for buying/selling the contract.
Options are categorized based on the relationship between the strike price and the underlying asset's price:
| Contract Type | Condition (S = Settlement Price, K = Strike Price) | Category |
|---|---|---|
| Call Options | S > K | ITM (In-the-Money) |
| S < K | OTM (Out-of-the-Money) | |
| S = K | ATM (At-the-Money) |
Settlement Currency
OKX options are settled in BTC or ETH, not stablecoins. Stablecoins can be used as margin in Portfolio Margin or Multi-Currency Margin modes.
Contract Multiplier
- BTC options: 0.01 BTC per contract.
- ETH options: 0.1 ETH per contract.
Features of OKX Options Contracts
| Feature | Details |
|---|---|
| Exercise Style | European options |
| Expirations | Daily, weekly, monthly, quarterly cycles. Learn more. |
| Underlying Assets | BTC/USD or ETH/USD index |
| Tick Size | 0.0001 BTC/ETH (price < 0.005); 0.0005 BTC/ETH (price ≥ 0.005) |
| Settlement Price | Hourly TWAP before expiration. Historical data. |
| Trading Hours | 24/7 |
| Fees | See fee schedule. |
Options vs. Futures Trading
| Aspect | Options Trading | Futures Trading |
|---|---|---|
| Rights | Buyer has rights; seller has obligations | Both parties must settle |
| Margin | Seller posts margin; buyer pays premium | Both post margin |
| Risk/Reward | Buyer: unlimited gain, limited loss | Both: unlimited gain/loss |
Minimum Capital Requirements
| Account Type | Minimum Requirement |
|---|---|
| Multi-Currency Account | $10,000 USD |
| Portfolio Margin | $10,000 USD |
| Simple Options | None |
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FAQ
Q: Can I use stablecoins to trade BTC options?
A: Yes, in Portfolio Margin mode, but settlements are in BTC/ETH.
Q: What’s the difference between European and American options?
A: European options are only exercisable at expiry; American options anytime before.
Q: How is the settlement price calculated?
A: Time-weighted average price (TWAP) of the index 1 hour before expiration.
Q: What’s the contract multiplier for ETH options?
A: 0.1 ETH per contract.
For further details, visit our options trading guide.