An options contract is a type of derivative that grants the buyer the right—but not the obligation—to buy or sell a specific quantity of an underlying asset at a predetermined strike price on or before a set future date. The buyer pays a premium to acquire this right.
- The contract buyer can exercise the options if profitable, requiring the seller to fulfill the payment.
- If unprofitable, the buyer may decline execution, and the seller owes nothing.
Key Components of Options Trading
- Underlying Asset: The asset being traded (e.g., BTC/USD index for Bitcoin options). OKX offers Bitcoin and Ethereum options.
- Expiration Date: The contract's expiry date.
- Strike Price: The fixed price for buying/selling the underlying asset when exercising call/put options.
Contract Type:
- Call options: Right to buy at the strike price.
- Put options: Right to sell at the strike price.
Exercise Style:
- American options: Exercisable anytime before expiry.
- European options: Exercisable only at expiry (OKX offers European-style options).
- Option Premium: The price paid to buy/sell the contract.
Options are categorized as:
- In the Money (ITM): Strike price favorable vs. market price.
- At the Money (ATM): Strike price equals market price.
- Out of the Money (OTM): Strike price unfavorable.
| Contract Type | Condition (S = Settlement Price, K = Strike Price) | ITM/ATM/OTM |
|--------------|---------------------------------------------------|-------------|
| Call Options | S > K | ITM |
| | S < K | OTM |
| | S = K | ATM |
Settlement Currency
OKX options are settled in BTC or ETH (not stablecoins). Stablecoins can be used as margin in portfolio/cross margin modes.
Contract Multiplier
- BTC options: 0.01 BTC per contract.
- ETH options: 0.1 ETH per contract.
Options Contract Specifications
| Parameter | Details |
|-------------------------|-------------------------------------------------------------------------|
| Exercise Style | European |
| Expirations | Daily, weekly, monthly, quarterly (March/June/September/December cycles). Learn more |
| Underlying Asset | BTC/USD or ETH/USD index |
| Settlement Coin | BTC or ETH |
| Tick Size | 0.0001 BTC/ETH (price < 0.005) or 0.0005 BTC/ETH (price ≥ 0.005) |
| Mark Price | Calculated via Black model with real-time volatility caps/floors. |
| Expiry Time | 08:00 UTC on expiration date |
| Trading Hours | 24/7 |
| Position Limits | View details |
Options vs. Futures Trading
| Feature | Options Trading | Futures Trading |
|------------------------|------------------------------------------|------------------------------------------|
| Rights/Obligations | Buyer has rights; seller has obligations | Both parties are obligated. |
| Margin | Seller posts margin; buyer pays premium. | Both parties post margin. |
| Risk/Reward | Buyer: Limited loss (premium). Seller: Unlimited loss. | Unlimited risk/reward for both. |
👉 Explore advanced trading strategies
Minimum Capital Requirements
| Category | Minimum Requirement |
|-----------------------------------|---------------------|
| Portfolio Margin Account | 10,000 USD |
| Simple Options | None |
| RFQ Minimum Size | 1,000 USD |
Fees & Account Settings
- Fee Structure: View here.
- Portfolio Margin: Recommended for advanced traders. Guide here.
Cross vs. Isolated Margin:
- Isolated: Positions are separate (ideal for long options).
- Cross: Enables margin offsetting (e.g., using stablecoins as collateral).
👉 Master options trading with OKX
FAQs
1. Can I trade options with stablecoins?
Yes, stablecoins like USDT/USDC can be used as margin in portfolio/cross-margin modes, though settlements are in BTC/ETH.
2. What’s the difference between European and American options?
European options can only be exercised at expiry, while American options allow early exercise. OKX offers European-style options.
3. How are options mark prices determined?
OKX uses the Black model with real-time implied volatility, adjusted for market caps/floors.
4. What happens if my option expires ITM?
ITM options are automatically exercised and settled in cash (BTC/ETH).
5. Is there a minimum trade size for options?
For RFQs, the minimum is 1,000 USD equivalent. No minimum for simple options trades.
6. How do I manage liquidation risks?
Use isolated margin for long positions or portfolio margin with delta hedging (e.g., perpetual futures) to offset risk.