Operational Guidelines for Warrants on Huobi’s Website

Step 1 Log in to Huobi Website

Log in to your website account on Huobi Global

 

Step 2. Complete identity verification

For users who have not completed identity authentication, please complete it first.

 

Step 3.Enter the warrant trading interface

Go to [Contract Trading] in the top navigation bar, click the drop-down menu and select [Warrant] to enter the warrant trading interface.

 

Step 4. Complete the investor evaluation assessment and check off the warrant product agreement

There are a total of 6 assessment questions. Choose the correct answer and select "I have read and agree to the "User Agreement" to submit the answer.

 

Step 5.Transfer assets

Click the Transfer button, select the source account, and enter the amount (in USDT) to transfer assets to your warrant account.

 

Step 6.Choose option products

The website version of Huobi Warrant currently has two types of products, European option spreads and American standalone options. With European option spreads, users can customize the exercise price range at a lower cost. With American standalone options, users only need to set one strike price. Overall, American standalone options feature transaction flexibility, early exercising, and unlimited benefit at lower costs.

 

European option spread: limited profit potential at a lower cost

As shown in the figure: Even if the increase of the BTC contract index exceeds the high exercise price of 48,500, the user can still only get an income of 1000 USDT (the high exercise price of 48,500 - the low exercise price of 47,500), with the net profit equaling income minus expenses payable.

 

American standalone option: unlimited profit potential at a higher cost (compared with European option spread)

As shown in the figure: When the increase of the BTC contract index exceeds the exercise price of 48,500, the excess represents the user's income, with no upper limit. Besides, users can exercise the warrant at any time before its expiration to lock in the income (income - expenses payable = net profit).

 

Step 7.Buy call/put options

On this page, users can select the option type/expiration date, set the exercise price, enter the quantity, and click [Inquire]. The system will calculate the premium for the option, and users can click [Buy] to place the order.

(Note: During the first transaction, you need to manually check off the “I have agreed to the warrant product agreement” box)

 

European option spread:

 

American standalone option:

 

Step 8.Confirm payment

Confirm the order information of the option contract, such as the underlying asset, the quantity, the exercise price, the breakeven price, and the premium. The premium is the fee for purchasing the option contract. Click Confirm to pay the option premium. After paying the premium, the corresponding amount will be deducted from the warrant account. At the same time, the system calculates the breakeven price of the option contract. For a call option, profits can be made when the underlying price rises above the breakeven price. For a put option, profits can be made when the underlying price falls below the breakeven price. Users can exercise options in advance to lock in profits based on the breakeven price.

 

European option spread:

 

American standalone option:

 

Step 9.Open contracts

At the bottom of the warrant trading interface, users can view the open contracts. The displayed information contains the remaining time, unrealized profit/loss, etc. In addition, users can choose to exercise in advance on this page. The remaining time represents the remaining time before the contract expires.

European option spread:

 

American standalone option:

 

Step 10.Exercise and settlement

The user can wait until the product expires, and the option contract will be automatically exercised and settled. At the same time, Huobi Warrant can be exercised in advance. On the Open contracts page, users can click "Exercise" to exercise the warrant in advance for settlement. The system will calculate the expected return based on the current underlying price.

 

European option spread: automatic settlement on the due date

In addition, Huobi Warrant’s innovative [Liquidate] function is a new option for European options and has become a powerful tool for European options trading.

The Liquidate features sells the subsequent rights and interests of the option, and the user is only responsible for the profit/loss before the liquidation.

Liquidation does not entitle users to receive any income other than the contract’s, and users do not need to pay other fees for the liquidation.

 

 

American standalone option:

The operations for American options are simple, and the warrant can be exercised at any time.

Clicking [Exercise] can quickly exercise your warrant.

 

Step 11.Closed contracts

At the bottom of the warrant trading interface, click [View closed contracts] in the Open contracts area to view the historical orders. The displayed information contains the duration, premium, income, status for each order.

For open contracts, you can also choose to [Liquidate/Exercise]

 

European option spread:

 

American standalone option:

 

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Huobi Global reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice. The above is for information purposes only and Huobi Global makes no recommendations or guarantees in respect of any digital asset, product, or promotion on Huobi Global. Prices of digital assets are highly volatile and trading digital assets is risky. Please read our Risk Reminder text here.