traditional finance

Binance is integrating physically settled options on over 1,000 US equities and ETFs into its unified trading account, extending its traditional finance expansion beyond crypto and tokenized stocks. The move relies on third-party infrastructure from Nest Trading and Alpaca Securities while keeping Binance as the customer-facing platform for non-US eligible users.

• Binance launches physically settled options on more than 1,000 US stocks and ETFs for eligible non-US users.
• Nest Trading Limited acts as introducing broker, routing orders to Alpaca Securities for execution and custody.
• Users must submit exercise instructions by 30 minutes before expiry or face auto-liquidation of in-the-money positions.

• $342.9B Equity-linked perpetuals volume in August, up 800-fold from January
• 79% Share of Binance TradFi perpetual activity from equity-linked products
• 1,000+ US equities and ETFs now available via physically settled options
• Sept. 1 Date Binance announced the physically settled options product launch

Binance announced on September 1 that it would offer physically settled options on more than 1,000 selected US stocks and exchange-traded funds, accessible through the same account that already houses cryptocurrency, direct equity holdings, and tokenized securities. The product is available only to eligible users outside the United States. Rather than building the infrastructure itself, Binance has structured the offering through Nest Trading Limited, which acts as an introducing broker, and Alpaca Securities LLC, which handles execution, clearing, settlement, and custody of any shares delivered upon exercise.

The expansion into traditional equity options represents Binance’s latest step in diversifying beyond its cryptocurrency core into regulated financial products. Since launching equity perpetuals in early 2024, the exchange has built significant momentum in traditional finance offerings, with equity-linked derivatives alone generating nearly 80 percent of the exchange’s total derivatives volume by mid-year. Options trading extends this reach into one of the most widely used risk management and speculation tools in global capital markets.

Three-Tier Infrastructure Separates Customer Access From Regulated Operations

The arrangement divides responsibilities across three entities. Binance serves as the customer-facing platform where users place orders, Nest Trading introduces those orders to Alpaca, and Alpaca executes and settles the trades while holding any delivered shares on the user’s behalf. This structure allows Binance to consolidate multiple asset classes within a single interface without becoming the entity responsible for securities clearing or custody.

Nest Trading’s Abu Dhabi Global Market register entry lists the firm as active under financial services permission 260000, with permitted activities including arranging deals, dealing as an agent, and arranging custody. However, the register explicitly states that Nest cannot hold or control client money. Alpaca Securities holds SEC and FINRA approval, with its BrokerCheck profile confirming it conducts options activity, securities clearing and settlement, and electronic trading, and can hold or maintain customer funds and securities.

This multi-entity model reflects a broader industry trend in which offshore cryptocurrency exchanges partner with regulated US securities firms to access traditional market infrastructure without obtaining US broker-dealer licenses themselves. The arrangement provides users with the convenience of a single integrated account while ensuring compliance with US securities regulations through licensed intermediaries. Alpaca has increasingly positioned itself as a technology partner to platforms seeking to offer US equities and options to international customers.

Physical Settlement and Exercise Mechanics Require Active User Instruction

Unlike standard equity positions, options contracts require explicit action before expiry. Exercising a call option results in delivery of the underlying shares, while exercising a put requires the holder to deliver them. Users must submit an exercise instruction through Binance’s platform no later than 30 minutes before the option expires.

In-the-money positions that receive no exercise instruction face automatic liquidation before market close; if the position cannot be sold, it may expire worthless and the premium is lost entirely.

Binance states that eligible retail users may buy calls and puts, with maximum potential loss limited to the premium paid. The exchange notes that option-writing strategies are subject to additional review and do not carry the same defined-loss guarantee. Alpaca requires all customer accounts to be approved before the first options trade, with applicants supplying financial circumstances, experience, risk tolerance, investment objectives, and a signed options agreement.

These approval and instruction requirements reflect regulatory safeguards designed to protect retail investors from the risks inherent in options trading. Options can be more complex and volatile than underlying equities, and regulators impose suitability requirements and disclosure standards to ensure that investors understand what they are purchasing.

Four Distinct Equity Products Now Coexist in a Single Binance Account

The options launch adds a fourth route to equity exposure within Binance’s platform. Direct US stocks give users ownership held through a US-regulated clearing broker. bStocks, which Binance previewed in June, are tokenized securities that do not confer direct ownership of underlying company shares. Equity-linked perpetuals provide derivative exposure without delivery of the underlying share. The new stock options grant a contractual right to buy or sell, with underlying shares delivered or received upon exercise and held by Alpaca.

Equity-linked perpetuals generated approximately $342.9 billion in volume during August, representing about 79 percent of Binance’s total TradFi perpetual activity, and grew more than 800-fold from January.

Shunyet Jan, Binance’s head of exchange and trading, described stock options as an “important next step” toward building a “fuller multi-asset platform.” The consolidated account experience creates convenience for users, but also requires them to understand which firm holds each asset, which regulatory rules apply, and what action is required before expiry or settlement.

The proliferation of equity product types reflects Binance’s strategy of capturing different user preferences and trading styles within a single ecosystem. Some users may prefer direct ownership, others may favor tokenized representations or leveraged derivatives, and still others may seek the hedging or income-generation strategies that options enable. By offering multiple routes to the same underlying assets, Binance increases the likelihood that any given user will find a product matching their risk appetite and strategy.

The launch demonstrates Binance’s strategy of centralizing product discovery and user experience while delegating operational responsibility for securities execution, clearing, and custody to regulated third parties. The practical success of the offering will depend on whether users can distinguish between Binance’s role as platform and Alpaca’s role as custodian, and whether demand for physically settled equity options justifies the infrastructure complexity compared to the exchange’s existing 800-fold growth in perpetuals during 2024. As regulatory scrutiny of cryptocurrency exchanges intensifies globally, Binance’s reliance on licensed intermediaries may also insulate the platform from direct liability for securities operations while testing the limits of how far offshore exchanges can distribute regulated products.