Bitcoin Forum

f you think that prices will move up, and you want to trade 1 BTC worth of value but do not have 1 BTC, you can buy a Call option and profit from Bitcoin’s volatility.

Why buy Call?

Unlike spot trading which requires full collateral, buying a Call option allows you to participate in the movement of an underlying asset for a relatively small price (Premium Payable) while enjoying leveraged returns.

Here’s a scenario

    You are bullish on BTC and expect it to trade above $6,000 on 26 June 2020
    You can buy a Call for 1 BTC with Strike Price at $6,000, Settlement Date on 26 June 2020
    The cost for making this position will be 1,211.07 SP$ (Premium Payable)

How do I profit?

    In order to profit from your buy Call, BTC will have to trade above your Breakeven Price at Settlement Date
    Breakeven Price is calculated as [Strike Price + Premium Payable]
    In this scenario, Breakeven Price will be $7,211.07‬ (6,000 + 1,211.07)
    The higher BTC trades above your Breakeven Price at $7,211.07 at Settlement Date, the greater your profit. Technically, your profit is unlimited
    However, if BTC trades below $7,211.07 , your maximum loss will be limited to your Premium Payable (1,211.07 SP$), even if BTC goes to $0


What are your thoughts on Call Options and Options in general?

You run the systemic risk of a trading platform failure

Whether it be accidental or intentional, if the platform (exchange) you trade on folds, you lose money regardless of the current price and the direction it is headed. This risk is negligible in case of regulated exchanges like CME, NYMEX and their likes, the ones that are trading derivatives. However, with cryptocurrencies, it is something that you should always be aware of, actually, be afraid of (apart from outright price manipulation by the platform of your choice). Put differently, your bitcoins are yours only if they are in your personal wallet (read, it is you who holds the keys from it)

Well, thats with every platform to be honest. I agree that it is an added risk but, with crypto being legal in a lot of countries now. Its easier to have a fair trail against them in case of gross negligence. Earlier, they could just say "oops, we got hacked and lost all the coins" and dissolve without any course of action taken against them. Now, its not the case. Regulation certainly helps.

There's another thing about derivatives (options and futures alike)

Futures contracts as well as options have expiration dates. This is kinda obvious, but when you feel it with your skin in the game and your money on the table, it feels totally different (I've been there). The point is, if the price of the underlying asset doesn't move much, you will still be losing money, i.e. the premium you paid to the seller of a futures or options contract. Simply holding a certain amount of cryptocurrency is a total win in this case -- you don't owe anything to anyone, and don't have to worry about rollovers and similar stuff

Think last week was a great time to buy call option for BTC. I missed it as I was unsure which way BTC was heading. ETH on the other hand!!! Amazing week.  8)

I really enjoy trading Futures and I've been looking into options, but haven't quite decided to try yet. It seems more risky, eventhough you know what the maximum loss can be...

There are a lot of similarities between futures and options. So, that gives you a head start. Check out Sparrow Exchange. They have a much simpler UI to accommodate new traders to get into Options. Also have a blog (https://blog.sparrowexchange.com/) to help you get started as well. Good luck.  :)

Confusing for me to be honest, I know it makes sense and I understand why people prefer to do this because it ensures nothing is stuck at the settlement date, you win or lose, but I'd rather just make bets on Bitcoin price if I want to bet (which I don't).

Freebitcoin actually has great options, you put yr money in there for a settlement date on price, and you win other people's money who bet on losing price.


Hope it lasts!

yes, that right, this week crypto is on fire,and the most interesting here it seems BTC have decoupled from stocks,with ETH leading the crypto movement,It seems that the BTC dominance has diminished again.However about data i've read,volume is still not convincing,but the fact,its not too bad because we are still in the big consolidation range.

Ethereum has 10x the volume of BTC in the ast 24hrs but both doing good respectively. Another week where buying calls would have been amazing. Lets hope the trend continues.

Perhaps my hopes are too optimistic, but somehow Bitcoin is a deflationary currency that is limited in its quantity. In addition, after the halving, Bitcoin mining decreased and this in a certain way creates a shortage of coins in the cryptocurrency market. I believe that in the near future this will start to show up very strongly on the market. In addition, I had very positive expectations regarding Ethereum, especially on the eve of July 30, because Ethereum 2.0 is scheduled for that time. today we have $ 326 for ethereum and this is only the beginning of a long-term rally.

Great time to buy some long dated calls then. For Both ETH and BTC. Sparrow Exchange has what you need in this case and just today, they announced secondary market for Options.

https://i.imgur.com/kaB8rRM.png

With the Secondary Market, you can buy or sell Sparrow Options before the Settlement Date, giving you more ways to control risk and take advantage of opportunities.

well,probably because Ethereum 2.0 Developers Announce ‘Final’ Testnet Before Network Launch (https://www.coindesk.com/ethereum-2-0-developers-announce-final-testnet-before-network-launch) , we can see how much people are enthusiastic about this, and it can be seen from eth that tends to be overbought in my opinion,and from my perpective,there just a small chance to see eth below 300 again,its just reminding me about ADA rally on earlier this month,its really overbought, on that time i just wonder when the retrace coming,but its nothing,just a small retrace,and continue rising,and that maybe happened to ETH.

Bitcoin call has been bullish for close to week which is reflecting on etheruem too. By the month end, we are surely going to see more bull run from etheruem likewise as bitcoin is growing.

Thanks, will check it out, although I'm currently using Binance for Futures.

If you want to trade options on cryptocurency exchange, i would advise Deribit. I have been studying this exchange for half a year and have been successfully trading on it. In my opinion, this is the best cryptocurrency exchange for options at the moment. You can trade ETH and BTC options and futures also (x100 and x50).

Well, I wouldn't discourage users to use other platforms but I personally think it best to try different(genuine) exchanges and try to get the best value out of your trades. That's what I do. I just go through the exchanges and see which platform gives the best value for my trade. If you just stick to one. You might be losing a lot of value on your trades if you stick to just 1 platform. My main platform is Sparrow Exchange since it offers 50% off on trading fees while I use SPO. So, it automatically brings be generally good value trades.

Have you seen how the price went up, and you still say that the dominance is falling? Lol. In case you don’t know, Ethereum makes major moves when Bitcoin is moving, it follows Bitcoin and that’s how it moves. Ethereum has increased in price, and so did Bitcoin, the price managed to stay above $10,500 and as I checked now it’s at $10,900 after it reached over $11.300 and dropped back. All it takes is just time and the price will go back.


But I do hate derivative exchanges for its obvious dangerous nature. When you opt for availing high leverage like 100x or 50x then you will get liquidated even for small correction. In this crypto space volatility is most common and you cannot be expect about strong one direction market all the times. So even the curent situation seems too bullish, it would be too good if we trade only on spot exchange or in derivative exchanges but with very small leverage like 2x or 5x or maximum 10x.

well,i post it on july 24 and if u read carefully every chart,data of btc before 25 july and comparing with ETH,u will know who take the lead, ETH has make the own major move,even when BTC is still following the stock market movements 8),correlation with the stock market since March 2020 it is something that many traders will already know,and BTC has found the own way a few day before you criticize me.

I mean, it was great one direction run for almost a week for BTC. The good thing about Sparrow Exchange is that they have launched a secondary market as well for options (https://blog.sparrowexchange.com/trade-sparrow-options-on-the-secondary-market/), so you can buy or sell Sparrow Options before the Settlement Date, giving you more ways to control risk and take advantage of opportunities.

BTC as well as ETH look very bullish again. With Hash rates going ATH but, ETH volatility seems to be going down from Oct to March 21.

Just a feeling about bullish is enough to trade on options trading? Probably you must include more guidelines for convincing this community ;).

Yes, this must be the perfect time for being bullish in bitcoin markets but we cannot expect the market to be staying bullish because corrections may happen time to time but when we are trading at options or derivative exchanges we cannot hold like how we are doing in spot markets. So, just spotting the markets when it will be bullish will not be the enough criteria to trade on options.

Just to avoid all the frustrations while trading, I am simply staying within spot market and I am making decent profits along with my strategy of holding until market direction turns in my favor.

Well, Sparrow Exchange has launched secondary market as well (https://blog.sparrowexchange.com/trade-sparrow-options-on-the-secondary-market/). So, you aren't constricted to the trades you've made and you can get out of them when you please. Also, if you notice when I first posted this with examples on how it would work, that was a bit over 3 months ago. BTC price was at about 8.8k USD. If you had taken a call Option for 3 months or a longer term 6 months which Sparrow exchange has. Imagine how efficient the trade would have been with respects to the returns? Not just that, you could have made a small trade for being bullish and then micro manage multiple weekly trades to suite your personal believes on how BTC would act in the following days. I believe that it would have been very profitable. If you are planing to HODL for a longer term, I feel it is a good idea to get long dated call options for a fraction of funds you are HODLing and enjoy leveraged returns. Its just my personal opinion though and the one that has worked for me so far.

I do not get it, if I am feeling bullish about bitcoin and know that I will make a profit, does that equal to me wanting even more risk? I mean sure I am fine with making a profit from bitcoin going up a bit, but I am not willing to risk everything I have just to make even bigger profit, that would mean I could make a lot more profit from something I am already doing but if I am wrong that also means I am going to lose it all.

So, let's say bitcoin is at $10k and I bought it, if it goes to $11k I make $1k profit, if I do option I would make more, like $5k lets say, but if I put it and it drops on the regular trading if it goes to $9k I lose only $1k, but if I do high amount of option that means I could lose all the $10k involved. I rather not get into that much risk just because I am bullish on bitcoin.

I think it is common knowledge that you shouldn't all in on a single trade and instead, have a well thought out plan and try to take advantage of the environment as days go by. You could take the example from the OP itself. Which stated that instead of HODLing 1BTC(6k as per example), you could just buy calls with 20% of the value or even lesser and act like you are actually HODLing for the said 1BTC. You are risking lesser for higher reward(at a higher risk if the market goes south but thats where risking less also helps). Also, if it does indicate that the market is going south, since crypto is highly volatile, you could buy puts or sell calls accordingly to your new position. With the introduction of secondary market available on Sparrow, you could just get out of the trade whenever you'd like as well, if you dont want to over complicate your position through the previous trades.

Stablecoin metric hints Bitcoin price will rise as buyers snap up BTC  (https://cointelegraph.com/news/stablecoin-metric-hints-bitcoin-price-will-rise-as-buyers-snap-up-btc?utm_source=Telegram&utm_medium=social)

Stablecoin supply ratio “3x stronger” than July 2019

Source - Cointelegraph

Good time to buy some calls again?

It doesn't really make sense, people are right , call option is not really the only way to go, I wouldn't do that neither. If you are feeling bullish about bitcoin the best thing you can do about it is to have a bitcoin heavy portfolio and maybe have like a 12 month installment type of credit card situation going on, every first of month some money taken out of your credit card, I think coinbase does that, I remember cex was doing it as well.

If you do something like that, you will have a lot of bitcoin in the future and at the same time you will be making a lot of profit over time as well since you are bullish. However you will also cost average down if the price goes down as well, so you are both making a profit if it goes up but it also does help if it goes down as well.

Well, I don't think anyone was suggesting that it is the "only" way to go but, if you are certain about the trend in the near future. I think call Options pays off handsomely in a bullish market. Also, it is similar concept. You could either risk the BTC you own to make more of it(if you are sure of a bullish movement).

I do the buy crypto with my monthly salary but I also trade options to optimize my profitability. I personally like the Options path for both aspects, bullish or bearish market.

Stocks may push Bitcoin to $10.8K, says trader as USD bull run falters  (https://cointelegraph.com/news/stocks-may-push-bitcoin-to-108k-says-trader-as-usd-bull-run-falters)

Bitcoin can hit $16K but only if this resistance level finally breaks  (https://cointelegraph.com/news/bitcoin-can-hit-16k-but-only-if-this-resistance-level-finally-breaks)

There are a few bullish cases for BTC at the moment and I am personally bullish. Time for some calls.  8)

Bitcoin sentiment at record lows … Does it mean the price will go up?  (https://cointelegraph.com/news/bitcoin-sentiment-at-record-lows-does-it-mean-the-price-will-go-up)

again...Time to set up some calls?

Bitcoin options still bullish despite this week’s $900 BTC price drop  (https://cointelegraph.com/news/bitcoin-options-still-bullish-despite-this-weeks-900-btc-price-drop)

Traditional market has been impacting BTC quite a bit, but it seems the worst is behind us and time for some Calls! :)

These trading conditions are very beneficial for long-term traders, but I would like to ask what is the number of days per order limit? Besides, the larger the amount, the more days in your option will be? Please explain to me this part because the limited number of days in this futures contract is so important.
If everything is really what you say then I guess futures traders on the forex / stock market will flock to the crypto market in the future ^^

Sparrow Exchange has Options for up to 6 months time. Yeah, if you are bullish and you notice the market is bullish as well. You could buy calls for long term and if the market does turn positive, you get handsomely rewarded accordingly. There are risks involved if it doesn't though. So, trade responsibly :)

Yes I think there is a bullish time now for btc. In nearest future btc price should be onwards over 10k. Limited supplies always grow in market from time to time and beat their high ever price. Bitcoin definitely has bullish chart might drops some but it will up. As a long term holder bitcoin will be a good buy option for any trader.

I'm not that familiar with call option, but based from what you told us, probably I still won't be buying any of these. Hundred percent sure, I will just use that money to directly invest on bitcoin, no need to buy for an option, if bitcoin does not move an inch, it's already a loss to me. And we are not sure if bitcoin will move really high days, weeks, months, or years from the time you bought a call option.

I get that the marketing and shilling of a place is hardcore in bitcointalk and everyone does it, and I get it everyone else does it so why shouldn't you do it as well, it makes sense, it is not a plus to do it because everyone does it anyway but it is at least allows you to be not in negative when everyone else does it and you don't.

However this is not only supporting and shilling one website, but it is also doing it for an idea as well. For example if you want to say "if you want call options, do it on our website" which is totally fine, you are providing a service to someone who wants it, perfectly understandable. However if you want to actually do end up saying "call options are better for bulls" that is actually promoting the idea of call options and not the website and I feel like that is not the way to go.

It’s not a about whether you like options trading or not, it’s all about whether you’re going to be good at it, do you know how it works and are you actually going to profit from it? That is what should be the main question. Options is really interesting , the idea of making money without having to invest much, who wouldn’t like that? But, if you don’t know how it works you’re going to be losing money, there are risks like you have stated it out.

I have seen a lot of people that goes into options and later they start complaining and calling out the platforms for being scammers, but funny enough these people are the ones that don’t have a clue on how things work there.

The trading options offered at the opening post are actually very attractive and profitable. But still it has a high enough risk,
if you look at the volatile Bitcoin price. This call option is great if used for traders who want big profits and dare to take risks.
For those of me who like trading with small risks, of course I avoid options trading.

You cannot earn a large amount of profit if you will not risk this is the common fear of the people who make in trading they don't want to risk any more than they have. In trading all if you want to earn more profit you need to wait for the right market price to pull it out all of your investment but if you don't want to risk more than that you can already get back and get the amount you earned. Profit is profit no matter what happens on it. We become more greedy because sometimes we have felt like
"There is more"
"No, I need to hold I can get more profit"
"Just wait"
Sometimes those greedy makes more risk and mistake to get lose and liquidated.

i agree! I lose because of that mentality before when I was newbie in trading. I thought that the market is always bullish and expecting a lot in my holdings. I never thought that when bears came, my portfolio will be liquidated as well. Greediness make us more poor in trading. But it can also maximize our profits. Unlike before, my recent trades was good and I think even the bear is approaching right now, I can make money in market using my TA.

In trading, we cannot expect a 100% return unless there is a hype or catalyst that pushes the price. As long as you gain 10-20 percent, it makes you a good trader.

I'd agree, greed generally becomes a factor when it comes to trading. I see that people on the forum would generally just like to HODL and wait and watch how it goes. It is fair play, but if you are planing to get a little bit more active and are bullish. Maybe a long term buy call would do the trick and enhance your earnings if it does get bullish.

If the market looks bullish, you can buy and sell, but it is no guarantee for you to make a profit because, at that moment, you will see the pump and dump of the price. In that time, your greediness will become bigger as you see the price moves fast up and down, making you make a mistake if you don't analyze. But if the market is not moving as expected, it is better to hold and wait because sometimes, that will be the best thing we can do.