Cryptocurrency Options Trading Explained

A Call Option is a contract that allows the investor to buy a specific amount of shares of a specific security at a fixed profit price on a fixed date and ورود به فارکس.For Instant, A Call Option allows you to buy a certain share of any stocks or bonds or even Index at any specified time duration ( Before the Expiry of the Contract ). A trader or investor can buy a call opions when he predicts the price of a stock or commodity is about to rise in future, and he wish to buy the commodiies at a fixed profit price on a specific fixed ime.The fees that you pay for buying a call option is known as “Premium”. The premium of the call option is nothing but a strike price ( Which will be same until the contract expires ) that you agree to pay to seller.

Thus call options is similar to Insurance, in which you pay for a contract over a time which allows you to purchase a stock at a certain price.As like renew options in Insurance,in options trading, the value of the options decays over the time.

A Put Option is a contract that allows investor to sell a specified amount of shares of a certain commodity or security at a certain amount of price over a period of time. As like Call Option, Put Option offers the traders the right to sell the specified security on or before the contract expires.

As similar to Call Option, the price you agree to sell the certain stocks is known as “Strike Price” and the fees that you pay for buying the put option is known as “Premium”.

The Put Option works in the same way as like Call Option, except one thing that when you buy a put option, you wish the price of the certain security to drop, so through which you can make profit.

Higher the strike price, more the put option’s intrinsic value.

Styles of Option
There are two styles of options available and they are

An American Style : This allows the traders to exercise the options any time before the expiry of contract.

An European Style : This allows the traders to exercise the options at only the time of expiry.

Most of the options that are available on the cryptocurrency market are of European Style which includes major crypto exchange such as Okex, CME and more.

Bitcoin Options
A Bitcoin option derives its value from the price of Bitcoins, which terms as the underlying asset here. Because of the volatility of Bitcoins, these Bitcoin options will have potential profits. A Bitcoin Option allows traders for the right not obligation, as in the case of Bitcoin Future Contracts.

Leave a Reply

Your email address will not be published. Required fields are marked *