Options (12)

When you think of crypto options, you may be reminded of the YOLO all-in option plays that often flood social media feeds with their staggering amounts of gains and losses. While most traders will be focused on the potential leveraged gains that can be made with crypto options, they often forget that it only takes a couple of bad, risky trades for all the gains to be wiped over. That's where mitigation tools like multi-leg crypto option strategies come in.

Picture this: your price alert goes off as your preferred cryptocurrency has finally hit your target price and it's time to gain exposure to the specific token you've been eyeing. However, you hesitate — what if it goes lower and you end up catching a falling knife? Ultimately, you decide to adopt a wait-and-see approach and avoid trading crypto until prices settle amid volatility.

The concept of arbitrage has long intrigued traders, and traders dabbling with crypto options are no exception. From capitalizing on market pricing inefficiencies to exploiting the unique pricing of derivatives like , arbitrageurs can strategically generate gains by simultaneously buying and selling identical assets thanks to the pricing differences between them. One such opportunity lies in understanding and making use of put call parity.

The world of cryptocurrencies is exciting, but let's face it, actively trading and scalping the crypto markets can be nerve-wracking, especially for beginner traders. Fortunately, with the options wheel strategy, crypto traders can breathe a sigh of relief. The two-step options strategy allows active crypto options traders to step back and take a more passive approach thanks to its simplicity.

The Bitcoin blockchain underwent a major event in April 2024: the Bitcoin halving. Expected to take place roughly every four years, this mechanism was written into Bitcoin's code during its inception and aims to slow down the creation of new bitcoins and eventually reach a finite supply of 21 million BTC. Similar to huge network upgrades like the Ethereum Merge and , the halving is a highly anticipated event that can significantly impact Bitcoin miners and traders.

In trading, leverage can be a powerful tool to increase gains without requiring more money to trade. Here, exchanges allow users to ‌borrow funds and trade larger position sizes than their own capital will allow. That might seem ideal, but it’s important to remember that when leverage is applied, the trader’s losses are magnified. As always, careful risk management and thorough research are a must. 

Options trading is a popular way to earn money in the financial industry. It allows traders to speculate on the future price of various assets. Options are essentially contracts that use an underlying asset. Traders can then bet on the future price of the asset. They speculate if it’ll go up or down, by how much, and when.

If you're familiar with long-term crypto trading, chances are you'll likely encounter instances when an ongoing catalyst causes huge portfolio volatility for your crypto holdings. While this might be acceptable for crypto traders who are more risk-tolerant, it can sometimes lead to dire situations like margin calls because of how volatility can propel a portfolio into liquidation.

Like its counterpart the strangle , the straddle option strategy is hugely popular among crypto options traders because of its neutrality that allows traders to lock in gains from significant price movements, regardless of the direction. Ultimately, this strategy is ideal if you’re expecting a big move in the market but are uncertain whether it will be upward or downward.

In the last episode, we talked about how to calculate PnL when you close your positions before expiry. In this episode, we will move on to calculate PnL of options on expiry. First, we need to underst

Keen to gain long exposure to a specific coin or token but want to keep your risk low? Multi-leg crypto option strategies like call spreads could be right up your alley. By tacking on an extra option leg, you can maintain the same amount of exposure while limiting your maximum potential loss.

Call calendar spread trading is an options trading strategy that seeks to profit from the changing prices over time of two options contracts with different expiry dates. Call calendar spreads are form