Crypto Trading Binance Options

Question 1

The premium can be taken out of the wallets below, with the exception of

Accepted Answer

Margin Wallet

Answer

When purchasing options, the premium is typically debited from a user's spot wallet or futures wallet, as these are common sources for funding trading activities. A margin wallet is primarily designated for holding collateral to support leveraged positions and borrowing, rather than for direct payment of option premiums.

Question 2

When will the premium be debited from Liza's account when she purchases a 10-minute put option at a strike price of 7000 SDT for a premium of 9 USDT?

Accepted Answer

Once the order has been placed, the premium will be subtracted.

Answer

When Liza purchases a put option, the premium is paid upfront by the buyer to the seller. Therefore, as soon as her order for the option is successfully placed, the 9 USDT premium will be immediately debited from her account. This payment secures her right to exercise the option, regardless of its future profitability or whether it expires worthless.

Question 3

Liza purchased a BTC call option for a premium of 100 USDT, and as the price of BTCUSDT futures increased, the expected unrealized profit from this option was 10 USDT. What will be the net PNL realized if Liza decides to settle now, before the contract expires?

Accepted Answer

-90 USDT

Answer

Liza paid a premium of 100 USDT for the call option. If the expected unrealized profit is 10 USDT, this represents the increase in the option's value beyond its initial purchase price. Therefore, if she settles now, her net PNL would be the unrealized profit minus the premium paid: 10 USDT - 100 USDT = -90 USDT, resulting in a realized loss.

Question 4

Where does the striking price come from?

Accepted Answer

When the maximum allowed quantity is reached. The order will not be successful, and a mistake will be noted. I should now break down the order into multiple smaller volumes.

Answer

This question appears to have a mismatched answer. The question asks about the origin of a 'striking price' (an options term), but the provided correct answer describes how to handle an order that exceeds a maximum size limit. If an order exceeds the maximum allowed quantity, it will not be successful, and the user should break it down into multiple smaller orders to complete the transaction.

Question 5

What is Binance Options' underlying asset?

Accepted Answer

Binance Futures

Answer

Binance Options contracts derive their value from Binance Futures contracts, making Binance Futures the underlying asset. This means that the price movements of the relevant Binance Futures contract directly influence the value, profitability, and settlement of the options. Traders use these options to speculate on the future price direction of the futures contracts without directly holding them.

Crypto Trading Practice Test

Crypto Trading Practice Test

Crypto Trading Binance Options