Options trading has become an increasingly popular way for investors to hedge risk, speculate on price movements, and generate income in the cryptocurrency markets. Among the leading platforms offering advanced derivatives, OKX Options stands out for its robust infrastructure, flexible contract designs, and European-style exercise model. This guide dives deep into what options are, how OKX structures its options contracts, and how they compare to futures—giving you a clear, comprehensive understanding of this powerful financial instrument.
What Are Options?
Options are a type of derivative contract that grants the holder the right—but not the obligation—to buy or sell a specific amount of an underlying asset at a predetermined strike price on or before a set expiration date. This unique feature makes options a versatile tool for traders seeking strategic advantages in volatile markets.
There are two primary roles in any options trade:
- The buyer (holder): Pays a premium for the right to exercise the option. If market conditions are favorable, the buyer can act; otherwise, they can let the option expire worthless, losing only the premium paid.
- The seller (writer): Receives the premium upfront but takes on the obligation to fulfill the contract if the buyer chooses to exercise.
👉 Discover how options can enhance your trading strategy with real-time tools and deep liquidity.
Key Concepts in Options Trading
Understanding these core terms is essential for navigating the world of options:
- Underlying asset: The financial instrument upon which the option's value is based. On OKX, the primary underlying assets are Bitcoin (BTC/USD) and Ethereum (ETH/USD) indices.
- Expiration date: The final day on which the option can be exercised. After this date, the contract ceases to exist.
- Strike price (exercise price): The fixed price at which the underlying asset can be bought (call) or sold (put).
Contract type:
- Call options: Give the right to buy the asset at the strike price.
- Put options: Give the right to sell the asset at the strike price.
Exercise style:
- American-style: Can be exercised anytime before expiration.
- European-style: Can only be exercised on the expiration date. OKX options follow this model.
- Option premium: The market price paid by the buyer to acquire the option.
Option Moneyness: ITM, ATM, OTM
An option’s value relative to the current market price determines its moneyness:
| Contract Type | Relationship Between S (Settlement Price) and K (Strike Price) | Status |
|---|---|---|
| Call Option | S > K | In-the-Money (ITM) |
| Call Option | S < K | Out-of-the-Money (OTM) |
| Call Option | S = K | At-the-Money (ATM) |
| Put Option | S < K | In-the-Money (ITM) |
| Put Option | S > K | Out-of-the-Money (OTM) |
| Put Option | S = K | At-the-Money (ATM) |
This classification helps traders assess potential profitability and risk before entering a position.
OKX Options Contract Specifications
OKX offers a well-structured, transparent options market designed for both novice and experienced traders. Below are the detailed specifications that define how OKX options operate.
Contract Types and Expiration Cycles
OKX supports both call and put options with multiple expiration frequencies:
- Daily: 1–4 days out
- Weekly: 1–3 weeks out
- Monthly: 1–3 months out
- Quarterly: Aligned with March, June, September, and December cycles
New contracts are listed daily at 08:30 UTC, ensuring continuous availability across various time horizons.
Core Contract Details
- Underlying Assets: BTC/USD and ETH/USD indices
- Contract Size: 1 BTC or 1 ETH per contract
- Contract Multiplier: 0.01 for BTC, 0.1 for ETH
- Settlement Coin: Denominated and settled in BTC or ETH respectively
Tick Size:
- 0.0001 BTC/ETH for options priced under 0.005
- 0.0005 BTC/ETH for those above
- Mark Price: Calculated in real time using the Black model, incorporating implied volatility derived from market data, with built-in volatility caps and floors for stability.
Settlement and Exercise Mechanism
- Expiry Time: 08:00 UTC on the expiration date
- Settlement Price: Based on the time-weighted average price (TWAP) of the index over the last hour before expiration, with snapshots taken every 200ms
- Exercise Method: All in-the-money (ITM) options are automatically cash-settled upon expiry—no manual action required
Trading Conditions
- Trading Hours: Available 24/7
- Trading Fees: Competitive rates aligned with OKX’s overall fee structure
- Position Limits: Vary by user tier and risk profile—details available in the platform’s risk management section
- Price Limits: Designed to prevent extreme volatility; governed by dynamic circuit breaker rules
- Contract Naming Convention:
[Underlying]-[Expiry]-[Strike Price]-[Type]
Example:BTC-250328-70000-C
👉 Access a full suite of tools to analyze and trade options with precision and confidence.
OKX Options vs. Futures: Key Differences
While both options and futures are derivatives used to gain exposure to crypto assets, their risk-reward profiles and obligations differ significantly.
| Feature | OKX Options | OKX Futures |
|---|---|---|
| Rights & Obligations | Buyer has right (not obligation); seller must fulfill if exercised | Both parties are obligated to settle |
| Margin Requirements | Seller posts margin; buyer pays only premium* | Both long and short positions require margin |
| Potential Risk/Reward | Buyer’s loss capped at premium; unlimited upside Seller’s profit capped at premium; unlimited downside risk | Both gains and losses can be unlimited |
* Applies under standard margining; Portfolio Margin users may have different requirements.
This fundamental distinction makes options particularly attractive for traders who want to limit downside risk while retaining significant upside potential.
Frequently Asked Questions (FAQ)
Q: Are OKX options physically or cash-settled?
A: OKX options are cash-settled. Profits or losses are paid in BTC or ETH directly to your account upon expiry.
Q: Can I close my options position before expiry?
A: Yes. You can exit your position at any time before expiry by placing an offsetting trade on the open market.
Q: What happens if my option expires out-of-the-money?
A: The option expires worthless, and you lose only the premium you paid. No further action is required.
Q: Do I need to hold BTC or ETH to sell options?
A: Yes. As a seller (writer), you must maintain sufficient margin in BTC or ETH to cover potential obligations.
Q: How is implied volatility calculated on OKX?
A: OKX derives implied volatility from real-time market data using the Black model, adjusted within predefined volatility caps and floors for stability.
Q: Can I trade options on mobile?
A: Absolutely. The OKX mobile app supports full options trading functionality, including order placement, portfolio tracking, and real-time analytics.
Why Trade Options on OKX?
With its European exercise style, automated settlement, and diverse expiration schedule, OKX provides a secure and efficient environment for options trading. Whether you're hedging a spot position, speculating on volatility, or running advanced strategies like spreads and straddles, OKX equips you with the tools and liquidity needed to succeed.
👉 Start exploring options today and unlock new dimensions in your crypto trading journey.