Insure your Bitcoin with options

[MCobian]

Interestingly enough what is offered by Sparrow exchange with my Bitcoin insurance for 6 months, when Bitcoin falls then I should be safe.
But I am not yet interested in this Bitcoin options, for me the risk management settings and the use of the stop-loss feature are enough to
make I feel safe. Maybe in the future I can change my mind with a good idea about Bitcoin with options, but now I am still feel safe the way
I trade.

[vennali]

Interestingly enough what is offered by Sparrow exchange with my Bitcoin insurance for 6 months, when Bitcoin falls then I should be safe.
But I am not yet interested in this Bitcoin options, for me the risk management settings and the use of the stop-loss feature are enough to
make I feel safe. Maybe in the future I can change my mind with a good idea about Bitcoin with options, but now I am still feel safe the way
I trade.

Its not just 6 months but it is up to 6 months. Meaning, you could set settlement date for every friday or beyond up to 6 months time. They have launched secondary market as well so now you can buy or sell your Options before the settlement date..giving you more control over your trades. Which has honestly been a blessing since, sometimes you are not too sure about your trades..thanks to the volatility and uncertainty.

[milandres0207]

Always getting REKT by the volatile crypto market? You can insure (aka hedge in trading terms) your crypto assets with options trading.

What does this mean?

Hedging is a trading strategy to reduce or eliminate the risk of holding one position by taking on another position.

One simple example is to compare it to insurance, which is basically a form of hedging.

How do options come in?

Options and its trading terminologies may sound complex. However in layman terms, the mechanics behind options trading can be referenced to the insurance industry — where people pay a premium to insure their health. In fact, we could say that insurance providers are simply options sellers!

Here’s an example of how you can use options to insure your BTC.

Example: Insuring your BTC by buying a put option

If you hold 1 BTC you bought at $7,000 and is long term bullish but afraid of short term volatility, you can buy a put option priced at $200 to protect your position against a possible crash.

If BTC nosedived, your maximum loss will be capped at $200.

If BTC dipped to $6,000 on Settlement Date, you will lose $1,000 value from your BTC. However, your put option will have an intrinsic value of $1,000 and can be sold for that amount thus offsetting potential losses and limiting your loss to your Premium Payable.

Summary

Options can be used as an effective hedging tool — as a protection against market volatility for cryptocurrency holders or as part of a wider trading strategy for professional traders.


Read full article with accompanying images here: https://blog.sparrowexchange.com/insure-your-bitcoin-with-options/

 

Sorry for being noob dude, Can you briefly explain or summarize it in simple explanation about sparrow exchange, what doesn't it means?
am I gonna invest in it then has a similarity of staking? Just not so sure if I am correct to my understanding, but anyway I think this will give me a bit of help to me.

[crwth]

Futures and options are very similar in terms of "hedging," and just like you pointed out.

Hedging is a trading strategy to reduce or eliminate the risk of holding one position by taking on another position.

I think what you didn't point out is the risk between the two choices that you have "Call" and "Put" Options. It basically has the same risk. but you need to know that there are fees on it when you are holding that particular position.

I still prefer to trade Futures even if it's riskier and has funding fees like in Binance Futures.

[vennali]

Futures and options are very similar in terms of "hedging," and just like you pointed out.

Hedging is a trading strategy to reduce or eliminate the risk of holding one position by taking on another position.

I think what you didn't point out is the risk between the two choices that you have "Call" and "Put" Options. It basically has the same risk. but you need to know that there are fees on it when you are holding that particular position.

I still prefer to trade Futures even if it's riskier and has funding fees like in Binance Futures.

Sparrow Exchange has 50% off on trading fees if you utilize their native token (SPO). If trading fees has become a burden. Maybe you could try multiple platforms to get the best possible value of your trades. 

~snip~

Sorry for being noob dude, Can you briefly explain or summarize it in simple explanation about sparrow exchange, what doesn't it means?
am I gonna invest in it then has a similarity of staking? Just not so sure if I am correct to my understanding, but anyway I think this will give me a bit of help to me.

I am not sure about that. Well,  about Sparrow Exchange, they are an Options trading platform located in Singapore. You could join their telegram(link in my signature) or write an email to them on support@sparrowexchange.com about investment opportunities(don't think they are looking for investments, but I could be wrong).