Binance is extending its precious metals derivatives line from perpetual contracts to the options market. The new product is launched on Nest Exchange, regulated by Abu Dhabi Global Market (ADGM), features a European contract design, and settles in USDT.

Previously, the platform launched perpetual contracts for gold and silver in January of this year. The company stated that these two types of products have generated billions of dollars in daily trading volume, hence the continued addition of corresponding options instruments.

Retail put options are not available for the time being.

Under the current arrangement, retail users can buy call and put options on gold and silver, but cannot sell options. Option write permissions are currently reserved only for exchanges and designated market makers.

This design limits the maximum loss for retail users to the premiums already paid, avoiding the potentially large losses that could occur when selling options. In contrast, while selling options allows for the collection of premiums, the risk is much higher when the underlying asset price fluctuates wildly.

Pricing referenced from multiple external data sources

These contracts do not rely on a single trading venue or a single token price. Binance stated that the gold and silver options will reference traditional precious metal market quotes from multiple independent third-party data providers, and form a weighted average benchmark price based on these quotes.

The company stated that this pricing method helps to bring contract prices closer to the overall level of the traditional market and also reduces the interference caused by fluctuations in a single data source.

More targets may be added later.

Binance stated that precious metals options are part of its efforts to expand access to traditional asset trading within a compliant framework, with the goal of allowing users to access more trading tools related to traditional markets without leaving the platform.

The company also stated that it plans to expand its options product to include more underlying assets and explore whether, under stricter rules, retail users could be allowed limited participation in options selling. To coincide with this launch, the platform is simultaneously providing customer education videos and standard risk disclosures.