Binance Requires Full USDC Reserves From Put Sellers

Binance announced cash-secured puts and covered calls on Oct. 15, allowing eligible stock-options customers to collect premiums while committing USDC or shares to possible assignment.

Under Binance’s new seller FAQ, put sellers must keep enough USDC in their Funding Account to buy every share covered by their contracts at the strike price. Binance reserves the funds when a sell order is placed, and the money cannot be used for other orders or withdrawn while the order remains active.

The premium is credited separately and does not reduce the required reserve. The funds stay locked after the order is filled. They are released if the order is canceled or expires without execution. If a put is assigned, the seller must buy the shares at the strike price, even if the market price has fallen below that level.

Binance’s FAQ says buyers can exercise options early, including overnight, and sellers cannot control whether early assignment occurs. Written positions are not automatically closed at expiration. Eligible long options may instead be closed on a best-efforts basis. Premium payments and share settlement after assignment follow a T+1 schedule.

Covered-call sellers commit shares they already own and may have to sell them at the strike price if assigned. They retain exposure to a decline in the stock’s value and give up gains above the strike price.

The seller instructions conflict with Binance’s Stock Options Trading Product Terms, which remain listed as version 1.0 and effective Sept. 1. Section 6.2 describes opening long call and put positions and closing them, while excluding option writing and short positions. Binance’s general stock-options FAQ, last updated Oct. 9, also describes a long-only product.

The linked terms exclude U.S. persons, people located in the United States, and accounts they beneficially own or control. They also list possible restrictions in China, Hong Kong, the European Union and other prohibited jurisdictions.

Binance’s stock-options service uses securities brokers. Nest Trading Limited acts as the introducing broker and routes orders to Alpaca Securities LLC, which provides execution, clearing, settlement and custody services. The public terms have not been updated to describe the seller obligations in the new FAQ.