Binance launches gold and silver options as record-breaking rally fuels demand for commodity hedges

Binance announced that it will begin offering options contracts on gold and silver.

The largest crypto exchange in the world, which is also now doubling as one of the largest venues for products that have been historically offered in the TradFi domain, added the new option contracts to its roster.

The introduction also comes at a time when precious metals have become the most crowded trade in global markets, giving Binance users a taste of the market right from the same account and balance that they already use for crypto.

The exchange stated that contracts will be settled in USDT and run through Nest Exchange Limited, its regulated trading venue in Abu Dhabi.

What exactly is Binance launching?

The contracts are European style, which means they can only be exercised at expiry, and no metal changes hands. They settle in USDT instead of the physical metal.

Retail users can only buy options, and this caps their maximum loss at the premium paid and removes the liquidation risk attached to short positions. Eligible institutional users and approved liquidity providers can also write options, meaning that they can collect premiums upfront in exchange for taking on that risk themselves.

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