Binance announced covered-call and cash-secured-put selling strategies on October 15, expanding its stock-options offering to allow eligible customers to collect premiums while committing capital or shares to potential assignment.
Put Seller Requirements
Under the new offering, cash-secured put sellers must hold enough USDC collateral in their Funding Account to cover the full strike price for every share covered by their contracts. The premium is credited separately and does not reduce that full reserve requirement.
When a put seller's contract is assigned, they are obligated to purchase the underlying shares at the agreed strike price, even if the market value has fallen. The premium received offsets only part of any loss from purchasing shares above market price.
According to Binance's seller FAQ, the required USDC is reserved when the sell order is placed and cannot support other orders or withdrawals. The funds remain held after an order fills and are released only if the order is canceled or expires unfilled.
Operational Terms
Early assignment can occur at any time, and sellers cannot control whether the buyer exercises their option. Unlike eligible long options subject to best-efforts closure at expiry, written positions are not automatically closed at contract expiration.
Premium payments and share settlement after assignment follow T+1 settlement.
Covered Calls
Covered-call sellers commit shares they already hold and must sell them at the strike price if assigned. This strategy caps gains above the strike price while leaving the seller exposed to stock declines.
Documentation Discrepancy
Binance's Stock Options Trading Product Terms, version 1.0 effective September 1, currently exclude writing and short positions, describing only long-only trading. The general FAQ, last updated October 9, similarly describes long-only trading. Neither document reflects the newly announced selling strategies, creating a conflict between the new seller FAQ and the published product terms.
Jurisdictional Restrictions
The stock-options terms exclude US persons, people located in the US, and accounts they beneficially own or control. Possible restrictions also apply in China, Hong Kong, the European Union, and other prohibited jurisdictions.
Binance's stock-options offering uses Nest Trading Limited as the introducing broker, which routes orders to Alpaca Securities LLC for execution, clearing, settlement, and securities custody.
