Help w Hedging - Puts?

[blockrevs]

Guys can you please advise if you are hedging and any puts along with covered calls that you think have a good value?

Need some direction on platforms to use, cost and how it works in general, and what you would buy have never done it thank you

many thanks

[BitMaxz]

Are you talking about hedge trading I never had done it before but I heard that you can do hedge trading on Binance?

I don't know exactly what you need is that a guide on trading with hedge mode?

On Binance there are some guides and videos on how to do hedge trading and explain how it works I'll give you a few videos and links below.

- Hedge Trading in Binance
- Understanding Price And Basis Of A Futures Contract

Does it seem the hedge trading is mostly used on future contracts or margin trade?

[blockrevs]

Yes lets say you own 1 bitcoin and dont want to sell it for tax purposes, but believe the price will go down from 50 to 20 then you can take a short against bitcoin and as it's going down you make money and dont have to sell your bitcoin and end up neutral in the end to not lose value on that bitcoin with the new earned funds

thanks for your links

anyone hedging now? apreciate input!

[adaseb]

Hedging by buying puts is not ideal. Why? Because the puts are very expensive. Buying puts is more as an insurance incase Bitcoin by a certain type can crash and you are protected but if it doesn’t and goes to ATH your put is useless but you made more money by not selling your Bitcoin.

Best would be to use a futures exchange like Bitmex or FTX and just short the March or June 2022 futures, and this way you don’t pay a lending or funding fee and you are shorting with a premium so you get a little more for your BTC than selling today.

[mk4]

Yes lets say you own 1 bitcoin and dont want to sell it for tax purposes, but believe the price will go down from 50 to 20 then you can take a short against bitcoin and as it's going down you make money and dont have to sell your bitcoin and end up neutral in the end to not lose value on that bitcoin with the new earned funds

Pretty much something like that. And you don't necessarily need to think that prices will go down; people do shorts just in case it goes down regardless of personal market sentiment. It just makes huge market movements(regardless of direction) have a lot less dramatic effect to your portfolio value.

anyone hedging now? apreciate input!

I personally don't as I don't mind huge swings with my personal net worth. I just make sure I have enough fiat to get by for years, and the rest is invested through spot.

[blockrevs]

Hedging by buying puts is not ideal. Why? Because the puts are very expensive. Buying puts is more as an insurance incase Bitcoin by a certain type can crash and you are protected but if it doesn’t and goes to ATH your put is useless but you made more money by not selling your Bitcoin.

Best would be to use a futures exchange like Bitmex or FTX and just short the March or June 2022 futures, and this way you don’t pay a lending or funding fee and you are shorting with a premium so you get a little more for your BTC than selling today.

What about buying a put and a covered call to offset each other on price and not have the expense but also have protection?  Thanks for your time with the tip about futures