What is Simple Option?

1. What is Simple Option？

Simple Option is a trading product that allows you to use leverage to enhance potential returns while avoiding the risk of liquidation. It's useful when you expect the market to rise or fall significantly but are concerned about sudden reversals that may cause large losses or forced liquidation. When you trade with Simple Option, you're actually buying an option contract.

2. Why doesn't Simple Option have a risk of liquidation?

When you buy a Simple Option, you're purchasing an option contract. An option is a right that can be exercised on its expiry date:

• If exercising the option is favorable at expiry, you'll receive the corresponding profit, while the seller covers the expense.

• If exercising the option is unfavorable, you can simply choose not to exercise it.

Your maximum risk is limited to the premium you paid to purchase the option contract. Regardless of market movements, you can't be liquidated before expiry, and no additional margin is required during the holding period.

3. What is the target price?

The target price is the reference market price that you expect the underlying asset to reach or exceed on the option's expiry date.

4. What is the strike price?

The strike price is the agreed price at which you may exercise the option at expiry.

5. What is the expiry date?

The expiry date is the date and time when the option contract ends (16:00 UTC+8). At expiry, you may exercise the option if it's favorable; otherwise, it will simply expire.

6. How is profit and loss (PnL) determined?

Your profit or loss is based on the relationship between the market price and the strike price at expiry:

• If the market outcome is favorable, you can earn a profit.

• If the market outcome is unfavorable, your loss is limited to the premium you paid.

Note: you may also close your position before expiry to realize profit if the market outcome is favorable by selling your option contract.

7. How are Simple Options settled?

At expiry, if you exercise your option, you won't receive the underlying asset. Instead, your profit will be paid in USDT (or in the same digital asset you used to purchase the option).