Binance stock put options lock full USDC reserves for sellers

Binance announced covered-call and cash-secured-put strategies on Oct. 15, allowing eligible stock-options customers to collect premiums while committing shares or USDC to a potential assignment.

For put sellers, assignment means having to buy the underlying shares at the agreed price, even if their market value has fallen.

A cash-secured put seller receives a premium for accepting that purchase obligation, and the agreed purchase price is the strike price. If the stock falls sharply, the premium offsets only part of the loss from buying at a price above the market.

A covered-call seller commits shares already held and must sell them at the strike if assigned. That caps gains above the strike while leaving the seller exposed to stock declines.

The linked September options terms exclude US persons, people located in the US, and accounts they beneficially own or control. They also flag possible restrictions in China, Hong Kong, the European Union, and other prohibited jurisdictions.

According to Binance's new seller FAQ, put sellers must hold enough USDC collateral in the Funding Account to pay the strike price for every share covered by their contracts. The premium is credited separately and does not reduce that full reserve.

The FAQ says the money is reserved when the sell order is placed and cannot support other orders or withdrawals. It stays held after a fill and is released if the order is canceled or expires unfilled. Premium payments and share settlement after assignment follow T+1 settlement.

The earlier stock-options offering already relied on securities brokers. Nest Trading Limited is the introducing broker that routes orders to Alpaca Securities LLC, which provides execution, clearing, settlement, and securities custody.

Binance's seller FAQ says early assignment can happen overnight, and the seller cannot control the buyer's decision to exercise. It also says written positions are not automatically closed at expiry, unlike eligible long options subject to best-efforts closure.

Linked terms still exclude selling

Those seller instructions conflict with Binance's linked Stock Options Trading Product Terms. The document remains version 1.0, effective Sept. 1. Section 6.2 allows opening long calls and puts and closing those positions, while expressly excluding writing and short positions.

The older general FAQ, last updated Oct. 9, also describes long-only trading. Neither document reflects the newly announced selling strategies.

Binance's new FAQ describes a premium in exchange for a funded share-purchase or delivery obligation. The public terms remain inconsistent with that description, leaving unresolved which seller-enabled terms govern those commitments.