Binance Launches European-style Vanilla Options Contracts

Cryptocurrency exchange Binance announced on Monday that it has launched "European-style" Vanilla Bitcoin Options contracts, offering users more choices to diversify their portfolio and manage their market exposure. The term "vanilla" refers to how the contract arrangement is generally simple, in contrast with more "exotic" products.

Prior to this announcement, the company has already offers American-style bitcoin options in April, which can be exercised at any time up till expiration. While European-style options can only be exercised by the option holder at the contract's expiration date. Users now have access to both styles of options to better manage their portfolio according to their trading strategies. 

According to Binance, the options are priced and settled in USDT. Users can both buy the options for hedging and trading, as well as write and sell options as an issuer.

The launch follows the completion of a testnet trial in November 2020 which gathered public feedback to further enhance user experience, such as the optimization of margin and risk control mechanisms. Users can enjoy a secure and liquid trading platform that Binance has become known for. Institutional and advanced users requiring a broad range of products can benefit from efficient liquidity and collateral management with a convenient single-wallet solution across Binance's many products.

Changpeng Zhao (CZ), founder and CEO at Binance, remarked: "Bitcoin's new high of crossing $28,000 underscores the research and hard work invested into the ecosystem which enabled this current rally. The crypto industry's growth is in good part attributable to a combination of factors, including wider public education and institutional interest, innovations in DeFi protocols and smart contracts, and development of a robust derivatives market. Binance will continue to play a leading role in creating useful products for the community."