What Is Options Trading in Crypto? The Most Important Terms Explained | CoinMarketCap

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More retail traders have started to experiment with crypto options, causing it to rise in popularity 🚀 In today’s article, CMC Academy dives into the basics of options and explains its types. 👇

. However, the market for altcoin options is growing as well. Some traders use these options to speculate on the direction and volatility of these assets, while others use them as a hedging instrument. Contrary to most other instruments, options can provide good trading opportunities even if the market is not making wild swings.

If Ethereum moves to 1,800 before next week, she might decide to close the position before expiry. The option will be worth at least $100, $70 more than what she paid for. In most cases, the option will be worth even more, as people will likely want to speculate on even higher prices, pushing the price of options further.

As you can see, the risk/reward ratio could make buying options a more attractive financial strategy. Of course, there are numerous strategies to make selling options an attractive tool as well, but these are better suited for more experienced options traders. As an example, Fred buys an Ethereum put option with a $1,600 strike for next week, at a premium of $110. In other words, he pays $110 for the right to sell Ethereum for 1,600 dollars, next week.

This brings us to some of the popular terms linked to the options market. You can find those terms at the end of this article.

 

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Yes.. though there is advanced tools in the market, it was a life saver. YellowNetwork NFT

Yes.. Thinking those period. CryptoOption Annex

Well explained. Yellow Blockchain

Back then it was a Popular tool helps to speculate the price. CryptoOption YellowCommunity

This is my Fav Tool. CryptoOption Yellow

CMC CryptoTrader This tool can be used to bet on the price of an asset on a specific future date.

when you hold a significant amount of spot Bitcoins but are expecting a downside in the coming week, you could buy a put option. This will cost you some option premium, but will cover the losses of your spot portfolio if prices do go down. AnnexFinance HOD HODarmy

This will push the value of the option up, generating decent profits. AnnexFinance HOD HODarmy

Traders buy call options when they believe the market price will be below the strike price at or before the date of expiry Annex HOD HODarmy Yellow

A put option grants the holder the right to sell the underlying asset at the strike price on or before the expiry regardless of what happens in the market. .YellowFam Annex $HOD

It does help in cryptotrading and decision-making. Do read it AnnexCommunity

In addition to buying calls, traders can also choose to sell them before the option hits the strike price if they believe that the underlying price will not make wild moves. Yellow Yellownetwork $YELLOW

Bearmarket crypto tools AnnexCommunity CMC

Of course, there are numerous strategies to make selling options an attractive tool as well, but these are better suited for more experienced options traders. Annex HOD HODarmy Yellow

Awesome update CMC cryptotrading ANN BNBChain

As you can see, the risk/reward ratio could make buying options a more attractive financial strategy. Yellow Annex AnnexFinance

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