CoinDesk Analysis Team
CoinDesk
Leading cryptocurrency exchange Binance said its trading division Binance Options will offer "T+3" daily call and put contracts tied to BNB, a cryptocurrency closely linked to the exchange.
Starting Wednesday, Binance Options will list the T+3 BNB/USDT options every day at 08:00 UTC. New listings won't happen on days longer duration contracts expire, the exchange said in the official blog.
T+3 refers to the obligation to settle securities trades by the third day following the trade date. In other words, users can trade the T+3 daily options two days before the expiry day. The options, therefore, will have an initial lifetime of three trading days at the time of introduction.
The new product will offer greater flexibility to traders and expand the exchange's existing product suite that includes longer duration BNB options and the T+2 daily BNB options.
The T+3 daily options will have similar specifications as other BNB options, with each call and put contract representing 1 BNB and expiring very day at 08:00 UTC. The contracts can be exercised only on expiry and will be settled in USDT.
Options are derivative contracts that give the purchaser the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy, while a put option offers the right to sell.
The launch of T+3 daily options comes amid heightened volatility in BNB. The cryptocurrency crashed to a 14-month low of $203 last week after the Wall Street Journal reported that Binance helped Russian users move money abroad, circumventing international sanctions. The report added to the mounting regulatory fears for the exchange.
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