Where to Trade Crypto Options in 2024
Investing in crypto options is a low-cost and riskless solution for buyers that want to trade crypto safely, especially when compared to crypto Futures. Furthermore, since an option works as a derivative contract, it gives buyers the right to decide whether they want to exercise the option or not.
This gives the purchaser a choice to buy or sell the asset at a set price without any obligations except for the option's cost. This beneficial contract ensures that buyers can contemplate the upcoming prices of an underlying asset which can be settled in dollars or other cryptocurrencies.
Different derivative exchanges offer different features when it comes to crypto options trading. This article has concluded everything you need to know about the best crypto options exchanges of 2023, so you can make the right move and stay ahead in the crypto market.
Start trading crypto options right now with Binance!What are Crypto Options?
Crypto options are a type of crypto derivatives, financial instruments for hedging or speculating on an asset. With crypto options, the trader has the option to buy or sell crypto at a time or price agreed upon beforehand.
There are two ways to categorize crypto options: call options and put options. The call option allows a buyer to buy a certain amount of crypto at a predetermined time and price. Meanwhile, the put option allows a seller to sell a certain amount of crypto at a predetermined time and price.
Crypto options are often confused with Futures, but they differ because a buyer or seller can choose not to accept the contract at the last minute. But, once you purchase a Futures contract, you have to accept the contract regardless of the price.
The way crypto options work isn't as complicated as you may think. First, the issuer issues the put and call options along with a "strike price" and an expiry date for the contract. The strike price is the price at which the crypto is sold once the option is exercised.
Depending on when the trader decides to exercise the option, the asset's price could have increased or lowered, resulting in a profit or a loss.
Crypto options can also be categorized into American and European options. American options can be exercised before their expiry date, while European options can only be exercised at the predetermined expiry date.
Best Crypto Options Exchanges 2024
Here is a complete comparison of the best crypto options exchanges and their minimum deposit, max leverage, and supported coins.
| Minimum Deposit | Max Leverage | Supported Markets | ||
|---|---|---|---|---|
$10 |
26-50x |
400+ (Binance US - 80+ cryptocurrencies) |
|
|
$0 |
20x |
300+ cryptocurrencies |
||
$0 |
125x |
343 cryptocurrencies |
|
Crypto Derivatives Fees Compared
Here is a complete comparison of the minimum and maximum maker and taker fees of the best crypto options exchanges of 2024.
| Max Taker Fee | Min Taker Fee | Max Maker Fee | Min Maker Fee | |
|---|---|---|---|---|
Binance |
0.1% |
0.1% |
0.1% |
0.1% |
FTX |
0.15% |
0.06% |
0.05% |
0.04% |
OKX (OKEx) |
0.08% |
0.07% |
0.06% |
0.05% |
Supported Contracts Compared
Here is a complete comparison of the crypto contracts supported by the best crypto options exchanges of 2024.
| Binance | FTX | OKEx (OKX) | |
|---|---|---|---|
Index Futures |
Yes |
Yes |
Yes |
Futures options |
Yes |
Yes |
Yes |
Inverse Futures |
No |
Yes |
Yes |
Crypto options |
Yes |
Yes |
Yes |
Perpetual Swaps |
Yes |
Yes |
Yes |
Best Crypto Options Exchanges Review
Here are the three best crypto options exchanges and all you need to know about them. In addition, we've included their benefits and drawbacks for crypto options trading.
Binance
Binance is one of the most well-known crypto options exchanges, offering over 65 tradable cryptocurrencies to its customers. However, the exchange is mainly known for its versatility in derivative contracts and competitively low fees.
A few of the trading options available on Binance include peer-to-peer trading, spot trading, and margin trading. It also has various order types available, such as limit order, market order, stop-limit order, stop market order, trailing stop order, post only order, and one-cancels-the-other order.
Although there is a learning curve in Binance, the exchange tops the charts when it comes to efficient options trading. It offers real-time charting tools that help you view moving averages and exponential moving averages.
You can also use Binance to view your portfolios, trade history, order book, and price charts. Overall, the trading experience on Binance is impeccable. In addition, the exchange offers a flat 0.1% fee structure for maker and taker fees. Crypto options trading on Binance offers only one strike price. This strike price is equal to the BTCUSDT perpetual contract on Binance Futures.
Binance offers American options instead of European, which means you can exercise the option before the predetermined expiry date. In addition, these options are settled in cash, which means the physical delivery of crypto is unnecessary.
👍 Pros
•Wide range of supported cryptocurrencies
•Low maker and taker fees
•Variety of trading options and order types
•Intuitive and straightforward design
•Risk and reward profile of Binance options
👎 Cons
•Margin trading and other order types are not available on the US version
•The learning curve for beginners
•No built-in digital wallet is available
OKEx (OKX)
OKEx is another popular cryptocurrency exchange that offers 343 cryptocurrencies for trading. It was established in 2017, and OKB is its native token. This exchange is known for its competitively low trading fee, which stands at $0.1 or less, depending on the trade.
Plus, traders that use OKEx even have the opportunity to get a 100% annual interest rate if they stake certain cryptocurrencies. The exchange also supports a wide range of payment methods, making it easy for anyone to trade crypto on the platform.
The trading experience at OKEx is as good as it gets. However, it's worth noting that it offers a platform for beginners and one for experienced traders. As a result, there's no learning curve for beginners, and veterans don't have to go through an over-simplified platform with minimum features.
OKEx's conversion form also allows you to swap cryptocurrencies with ease. In addition, the fee structure on the exchange is also pretty impressive, as most of it varies based on trading volume and account holdings.
Although the exchange doesn't disclose fees for withdrawals and deposits, you'll pay a flat 0.1% fee for spot trading. But you may benefit from discounts as a high-volume trader or if you have large account holdings.
OKEx allows crypto options trading for famous cryptocurrencies such as ETH or BTC. What sets them apart from other crypto options exchanges is that their options Discovery product is beginner-friendly and easy to use.
Plus, their options trading market offers high liquidity, allowing traders to always get the best prices. Lastly, OKEx traders can understand market trends with the help of the given host of data from options markets.
👍 Pros
•Low trading fees
•Low maker and taker fees'
•Various payment methods are available
•High-interest staking opportunities
•Beginner-friendly options Discovery
•High liquidity in the options market
•Access to options market data
👎 Cons
•Not available in the US
•Low liquidity for certain currencies
•Limitations for withdrawals
FTX
FTX is a crypto options exchange mainly known for its versatility, market-leading liquidity, and ease of use. This exchange supports over 300 cryptocurrencies and was established in 2019. Its derivatives trading includes famous cryptocurrencies such as ETH or BTC.
Derivatives, options, and leveraged tokens are just a few of the products offered by FTX. Other than spot trading, FTX is also known for NFT trading and efficient derivatives trading, such as options trading.
The trading experience on FTX is educational and guided at every step. It's also worth noting that the maker and taker fee structure on FTX is tiered based on the 30-day trading volume of the user.
If you reach tier 6 with a 30-day trading volume of over 50,000,000, you can benefit from a 0% maker fee and 0.04% taker fee. In addition, if your FTT holding exceeds $5,000,000, you get a 60% on all FTX fees.
Traders can use FTX US Derivatives for crypto options trading, but it's worth noting that all contracts on the platforms are settled physically rather than in cash.
👍 Pros
•Supports margin and futures trading
•Access to advanced markets
•Wide range of supported cryptocurrencies
•Tier-based discounts and fees system
•24/7 trading
👎 Cons
•No live chat support option
•Not available for US users
How To Trade Crypto Options
Here is a complete step-by-step guide on how to trade crypto options
First, you must register on any crypto derivatives exchange that supports options trading. Binance, OKEx, and FTX are a few great options to consider.
Click on "Open Now" to activate your crypto exchange account.
Navigate to the "options Trading" page.
Click on the contract you want to trade based on the price and date.
Then, adjust the position mode before selecting "Hedge Mode. Don't forget to set the Leverage Multiplier.
Then, transfer your assets into the Futures account.
Click on "Open a Position" and see the various order types available on the exchange, such as limit, market, and stop limit.
Continue to monitor your position. You can check all your positions at the bottom of the screen.
Finally, close your position by clicking on the "Limit Close" or "Market Close" option. Make sure that you select a one-way mode.
Click on "Close" under the Hedge Mode option. Now, you're ready for options trading.
Should I Trade Crypto Derivatives?
Crypto derivatives are mainly used for hedging or speculation. This type of trading is ideal for investors looking for more flexibility than just spot trading in an exchange. Crypto derivatives allow traders to explore different types of trading, such as Futures, options, and Perpetual Swaps.
Depending on the type of crypto derivative they choose, investors can purchase contracts that allow them to buy or sell crypto at a predetermined time and price. Those that are ready for such a commitment should trade crypto derivatives.
But, if you need a little more flexibility in crypto derivatives trading, options trading is a much better option. Crypto options trading allows you to exercise the option only if you want to; you can back out anytime.
The benefit of crypto options is that if you back out of a contract, you only have to pay the initial amount for the option, not the cryptocurrency. However, backing out of too many crypto options will only leave you with no cryptos in your account while still paying an additional fee multiple times. So, use the flexibility of options wisely.
It's important to keep in mind that the crypto market is pretty volatile, so you can never be sure about the prices of tokens in the future. This is not a recommendation or financial advice for crypto derivatives trading. Investors must invest in crypto at their discretion if they have the appropriate risk appetite and financial freedom.
Pros
Here are a few advantages of trading crypto derivatives:
Crypto derivatives help traders practice market efficiency and ensure accurate market prices
Derivative contracts require low transaction fees
Crypto derivatives help with risk mitigation when it comes to fluctuating crypto prices
Crypto derivatives help determine the price of crypto
Traders can benefit from crypto derivatives by using leverages to increase profit margins
Crypto derivatives markets are highly liquid
Crypto derivatives help traders diversify their portfolios and minimize portfolio risks
Cons
Here are a few disadvantages of trading crypto derivatives:
Crypto derivatives can be volatile due to fluctuating crypto prices
Crypto derivatives trading is not legal globally
OTC Futures trades don't always stick to compliance procedures
Summary
Crypto options trading is a great alternative for those that prefer the perfect combination of commitment and flexibility in their crypto trading. They commit to a predetermined time and price but only have to go through with the contract if the profit margin is good enough.
Binance, OKEx, and FTX are some great exchanges for options trading safely and efficiently. They offer a wide range of cryptocurrencies and order types, low transaction fees, and an amazing trading experience.
Like any crypto trade, derivatives trading can be pretty volatile and risky. So you must ensure that you're careful and consider your financial freedom before investing your hard-earned money into crypto. Follow our step-by-step guide on how to trade crypto options efficiently.
FAQs
Here are the answers to the most frequently asked questions about the best crypto options exchanges in 2024:
How Do Options in Crypto Work?
A buyer or seller can purchase an option to buy or sell crypto at a predetermined time and price. For example, the call option allows you to buy crypto at a predetermined time and price, while the put option allows you to sell crypto at a predetermined time and price.
Either way, buyers can back out of this contract if they see fit. For example, if they bought an $800 option for Bitcoin worth $80,000, they would first have to pay the $800 fee for the option. Until the contract's expiry date hits, buyers can watch the BTC's price increase and drop.
For example, if the price has increased to $120,000 by the end of the contract, the buyers gain a $40,000 profit. Then, they may choose to accept the option and go through with the contract. However, the price may also drop.
If the price drops to $60,000, the buyer faces a $20,000 loss. At this point, the buyer may choose not to go through with the contract. The benefit of American options is that the buyer may purchase the asset before the contract's expiry date. This way, the buyer can purchase the asset at its peak price.
How Do Bitcoin Options Differ from Other Options?
Bitcoin options are different from other options as they are European options. This means traders cannot exercise the option before the contract's expiry date. But, you can buy or sell it before the expiry date.
What Are Perpetual Contracts?
Perpetual contracts are another type of crypto derivative similar to crypto Futures in some ways. But, unlike Futures and options, Perpetual contracts do not have a predetermined time or expiration date.
Instead, you can trade these contracts for an indefinite amount of time. Traders can benefit from Perpetual contracts by holding leveraged positions without being restricted to an expiry date. In addition, they trade close to the index price of crypto because of perpetual fund rates.
Why Are Crypto Derivatives Important?
Crypto derivatives are important as they help increase liquidity in the crypto market, making it easier for traders to open or close positions. Other than that, they also help with portfolio risk mitigation and diversification. Lastly, crypto derivatives help trade optimize the price discovery by facilitating short-term or long-term investments.
Methodology for compiling our ratings of crypto exchanges
Traders Union applies a rigorous methodology to evaluate crypto exchanges using over 100 quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
User reviews. Client reviews and feedback are analyzed to determine customer satisfaction levels. Reviews are fact-checked and verified.
Trading instruments. Exchanges are evaluated on the range of assets offered, as well as the breadth and depth of available markets.
Fees and commissions. All trading fees and commissions are analyzed comprehensively to determine overall costs for clients.
Trading platforms. Exchanges are assessed based on the variety, quality, and features of platforms offered to clients.
Extra services. Unique value propositions and useful features that provide traders with more options for yield generation.
Other factors like brand popularity, client support, and educational resources are also evaluated.
Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
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