In a first-of-its-kind attempt among the major crypto exchanges, Bitget has introduced US stock option trading alongside cryptocurrency and CFD markets. The initial rollout supports over 540 single-leg long call and put contracts, allowing users to trade assets from major indices like the S&P 500 and NASDAQ-100 directly using their Bitget accounts.
The introduction of US stock options is the next step in the expansion of Bitget’s stock product line after tokenized stocks. Thus, Bitget has progressed one step closer to its aim of creating a platform for trading crypto stocks, commodities, and other global assets.
What is a US Stock Option?
In simple terms, a stock option gives the investor the right to buy or sell a stock at a previously agreed price and date. There are two types of options: call and put. A call option is a bet that a stock’s price will rise. With a call option, you will profit if the market price exceeds your strike price before expiration. On the other hand, a put option is a bet that a stock’s price will fall. That means you will profit if the stock drops below your strike price. Unlike European options that can only be exercised on the final day, US equity options are American-style, meaning the option holder can exercise their right to buy or sell the shares at any time before the expiration date.
US stock options are different from their European counterparts. The primary difference between American and European options is when they can be exercised. American options can be exercised on any trading day up to the expiration date, while European options can only be exercised on the final expiration date. Thus, the American options give greater flexibility to the investors. Because of the added flexibility to exercise early, American options generally come with higher premiums than equivalent European options
Benefits of American-style Options
American-style options offer several benefits. The most important advantage is that they provide the chance to exercise the contract at any moment before the expiration date. It also allows exercising the contract before the ex-dividend date, so that the option holder can own the stocks and receive dividends for the following period. Thus, the American stock option makes it easier to maximize profits and stimulates higher market participation.
How to Trade US Stock Options on Bitget?
Here is a step-by-step guide to trading US stock options on Bitget.
- Access the Platform: Open the Bitget App or website and navigate to the Stock+ or Stocks section.
- Account Setup & Funding: Open a U.S. stock account if you haven’t already, and transfer or deposit USDT or USDC into your securities account.
- Select the Asset: Search for your preferred U.S. stock or ETF using the ticker symbol.
- Choose Your Option: Tap on Options at the bottom of the stock’s page. Switch between Call and Put options, and swipe to explore various strike prices and expiration dates. Choose an option that meets your requirements.
- Setup and Submit: Enter your desired limit or market price and the number of contracts. Review the estimated premium and then submit the order.
Key Considerations Regarding US Stock Option Trading at Bitget Exchange
Trading US stock options on Bitget enables you to speculate on or hedge major US equities and ETFs directly from a crypto-native account. However, there are some key aspects to consider.
- Product Limitations: Bitget’s initial options rollout centers on single-leg long call and long put options. Advanced multi-leg strategies are unavailable as the Stock+ product is tailored for straightforward directional plays. That means there is an initial limitation in Bitget’s product line.
- Margin and Leverage Rules: Unlike traditional stock options trading, which involves margin borrowing, buying options requires a full upfront payment of the premium. The margin rate for long call or put options is 100%.
- Zero Trading Commissions: Bitget offers zero commission on US stock options, though there may be third-party clearing, SEC, or FINRA fees.
- Underlying vs. Derivative Exposure: Depending on the specific option tier accessed on your app (e.g., Bitget’s Stock+ vs. tokenized stock derivatives), you may be trading perpetual contracts or direct exposure rather than standard equities.
- Settlement Mechanics: The platform follows a T+1 settlement cycle for US stock options. That means the payment for an option’s premium is finalized on the next business day. Similarly, if an option is exercised or assigned, the transfer of the underlying shares and the aggregate strike price are also settled on a T+1 basis.
The Bottom Line
Bitget’s introduction of US stock option trading through its platform is an innovative, future-centric initiative on its part. This is the first of its kind from a major cryptocurrency exchange. With this facility, Bitget users can invest in crypto and stocks on the same platform.