About Bybit’s USDC Options Trading
Bybit offers cash-settled European-style options that must be exercised at contract expiration.
Options are divided into two categories: call and put.
- Call option
- The buyer has the right (but not the obligation) to buy the underlying asset at a set price on the expiration date.
- Put Option
- The buyer has the right (but not the obligation) to sell the underlying asset at a set price on the expiration date.
The options types offered by Bybit include: weekly, bi-weekly, monthly, bi-monthly and quarterly options.
Options contracts will settle on the Friday of the week of expiration at 8:00 AM (UTC).
What is the difference between options and futures?
Both options and futures are derivative instruments that facilitate traders to hedge against market shocks.
The main differences between options and futures are as follows:
- With options, the contract holder has the right (but not the obligation) to buy or sell the underlying asset at the strike price on or before the option expiration date.
- Futures require the contract holder to buy or sell the underlying asset on a specific date in the future.
Fees, Limitations and Option premium
Options trading is designed with three types of fees: handling fee, delivery fee and liquidation fee.
The minimum order quantity is 0.01 BTC.
The maximum order quantity is 200 BTC.
The maximum open interest is 100 BTC.
Option premium is the amount that the buyer must pay to the seller in order to obtain the right to exercise a call or put option.
Premium is calculated based on order price and order volume.
How to switch between Regular Margin and Portfolio Margin modes?
To adjust the margin mode, your USDC futures account needs to meet the following conditions:
- Your USDC futures account has zero positions.
- There are no active orders or conditional orders in your USDC futures account.
Margin requirements Your USDC contract account equity needs to reach at least 10,000 USDC.
If the equity is less than 10,000 USDC, the combined margin mode cannot be used.
About the initial margin (IM) ratio
The initial margin (IM) ratio in the account depends on the hedging relationship of all USDC perpetual contracts and options.
If there is a hedged position, the initial margin amount in the portfolio margin will be lower than the amount required under the regular margin mode.
If all positions are in the same direction, the starting margin amount in the combined margin will be higher than the amount required in the regular margin mode.
This is because the risk mechanisms of the two modes are different, which in turn lead to different calculation results.
How do I deposit funds into my USDC account?
Please log in to your USDC contract account and click Transfer to transfer USDC from your spot account to the USDC contract account.
When using USDT to trade USDC options, you can convert the USDT in your spot account into USDC at the real-time exchange price, and then transfer it directly to your USDC contract account.
In addition, you can trade in Bybit spot market to exchange for USDC.
Can I be alerted if my USDC futures account has insufficient margin?
When the available maintenance margin in your USDC account exceeds the risk limit, you will receive a margin call email notifying you to add USDC to avoid forced liquidation.
Note that alert emails will only be sent every 15 minutes.
How to Manage Position Risk in USDC Options?
You can manage position risk through sub-accounts.
The profit rate of the sub-account is independent of the parent account. Currently, asset transfer between sub-accounts is only possible through spot accounts.
Please check Bybit official website or contact the customer support with regard to the latest information and more accurate details.
Bybit official website is here.
Please click "Introduction of Bybit", if you want to know the details and the company information of Bybit.
Comment by Hans
April 24, 2024
as I am trading here various assets, for me it's the most important feature. i mean, flexibility in tradable markets. i alternate trading styles, meaning that sometimes I trad...