If you’ve been trading for any length of time, you will understand the need to have a vast range of tradable instruments for your trading. We can’t all be currency traders or commodity traders. In the same way, even within the crypto space, we can’t all be Futures or Options traders. We have to claim our space consciously.
But while the beauty of variety exists with Binance, traders in the bud need to be able to know which of the two (Futures or Options) is most suited for them. To help out, let’s take a look at the general ideologies behind each.
A futures contract gives you the obligation to trade, invest, and speculate a cryptocurrency asset’s future price at a given period. Futures are one of the most heavily traded instruments in the Binance cryptocurrency universe.
Options give you a right (not an obligation) to sell or buy a cryptocurrency asset at a specified time. Like all other aspects of trading, it is a speculatory affair where you either call or put on the tradable options.
Binance allows you to trade American Options. This means that as long as the Options contract has not reached its maturity date, you have the right to sell or to buy it. i.e., to put or to call.
Trading Options In Cryptocurrency
Options allow you to hedge your tradable assets so that you can capitalize on upwards or downward movements of the markets.
Key Difference Between Binance Futures and Options
The major difference between Futures and Options lies in the obligation and the right to select when you wish to buy or sell an asset.
The Intertwined Relationship between Binance Futures and Options
While Binance Futures and Options are very different, it is important to note that the actions you take while speculating in Binance Options can affect your open Futures positions. The activities on your positions are tied to your Binance Futures account.
For example, before you can open your options account, you will first create a futures trading account and activate your futures account before you can start trading.
Which is Better, Binance Futures or Options?
While some websites and people may recommend the better or the two, the one you go with should be entirely dependent on the kind of trader you intend to be and your relationship with risks. If you’re convenient with the obligation to buy or sell at a specified price, then you’d do well trading Futures. However, if you prefer the flexibility of having the right to buy or sell an asset at a specified time, you may want to look into Options.
But while you can trade Futures without trading Options, you can’t trade Options without trading Futures- or opening a futures account. Hence, whatever you do, you might want to look into understanding and spending some time with Futures before delving into Options on Binance as well.