Option contracts represent one of the most versatile financial instruments, granting buyers the right—but not the obligation—to execute trades at predetermined prices before expiration dates. This guide explores their mechanics, trading strategies, and platform-specific workflows while optimizing your experience with SEO-friendly structuring.
Understanding Option Contracts
What Are Options?
Options are derivative contracts providing the right to buy (call) or sell (put) an underlying asset at a fixed price (strike price) by a specified date (expiration). Key characteristics include:
- Call Options: Profit when asset prices rise above the strike price.
- Put Options: Benefit from declining asset prices below the strike price.
Example:
A BTC call option at $30,000 allows buying BTC at this price even if its market value surges to $35,000.
How Options Work
- Buyers pay a premium to acquire rights. They profit by exercising advantageous positions or letting unprofitable contracts expire.
- Sellers collect premiums but must fulfill obligations if buyers exercise rights.
👉 Master option trading strategies
Trading Option Contracts: Step-by-Step
Step 1: Fund Transfer
Before trading, transfer assets from your funding account to the trading account:
- Navigate to Assets > Fund Transfer.
- Select the currency (e.g., USDT).
- Enter the amount and confirm.
Tip: Transfers can also be initiated via the Trade page.
Step 2: Account Configuration
Set up your trading environment:
- Access Account Information > Trading Settings.
- Choose Contract Mode (Unified/Portfolio) and Advanced Mode.
- Define Units: Contracts/coins for trading; coins/local currency for pricing.
Step 3: Executing Trades
Call Options (Bullish Outlook)
Buy to Open: Purchase calls anticipating price increases.
- Select BTC/USDT > Options > Professional Mode > All Options.
- Filter by expiry date and strike price.
- Submit a limit order with desired price/quantity.
Simplified Alternative: Use Quick Select for streamlined trading.
- Sell to Close: Exit positions via the Positions tab or market orders.
Put Options (Bearish Outlook)
Sell to Open: Write puts expecting price drops.
- Similar workflow as calls but select Put Options.
- Buy to Close: Terminate sold puts before expiry.
Platform-Specific Instructions
Mobile (APP)
- Fund Transfer: Assets > Fund Transfer.
- Trading Interface: Swipe to Options mode.
- Order Types: Limit/market orders with adjustable leverage.
Web
- Asset Transfer: Trade > Leverage > Transfer.
- Advanced Tools: T-shaped quotes for granular control.
- Position Management: Real-time P/L tracking.
Key Features of OKX Options
- Expiry Variety: 8 maturities (daily, weekly, quarterly, etc.).
- Auto-Exercise: Profitable options auto-settle at 4 PM HKT.
- European Style: Exercise permitted only at expiry.
Risks and Best Practices
✅ Do
- Hedge portfolios with options.
- Monitor implied volatility.
❌ Don’t
- Over-leverage or ignore expiry timelines.
- Chase illiquid strike prices.
FAQs
Q: Can I exercise options early?
A: No. OKX offers European-style options, exercisable solely at expiry.
Q: What happens to losing positions?
A: They expire worthless—no further action needed.
Q: How are premiums determined?
A: By intrinsic value + time value + market demand.
Q: Can I trade options without experience?
A: Yes! Use Quick Select for guided trades.
Final Tips
- Start with small positions.
- Analyze historical volatility.
- Use stop-loss orders.
👉 Explore advanced option tools
By mastering these concepts, you’ll navigate options markets confidently while maximizing returns and minimizing risks.