How to trade under this high volatility

[xinxi]

Directly trading BTC/USD is quite risky at this moment. Instead, you can trade volatility.
Seriously? How can the volatility be traded?
Yes, you can trade volatility using options.

For example, if BTC/USD is now 400, and you know the volatility will be high, you can simultaneously buy a CALL option with strike price equal to 420 and a PUT option 380. Then you will be able to make profit no matter which direction BTC/USD goes in, because if it goes above 420, the CALL option will win, and if the price goes below 380, the PUT option will win.

For more information, you can have a look at my newly opened bitcoin options exchange platform https://coinut.com.

We are just open, so the liquidity may not be very good at this moment. But you know, a new market always means good chances for making profit if you understand how it works quickly. If you want to become a market maker, please contact me, and we will have some special offer for you.

[bluemeanie1]

BTC volatility is actually more volatile than BTC.

[wangxinxi]

Can you elaborate?

[BitCoinPokerBro]

this doesn't make sense as far as traditional options go so maybe it works differently?

[wangxinxi]

this doesn't make sense as far as traditional options go so maybe it works differently?

May I know which part does not make sense to you?

[FattyMcButterpants]

BTC volatility is actually more volatile than BTC.

This is expected. Volatility is a derivative of price and derivatives by definition have larger swings then the underlying security they are attempting to mimic.

[wangxinxi]

BTC volatility is actually more volatile than BTC.

This is expected. Volatility is a derivative of price and derivatives by definition have larger swings then the underlying security they are attempting to mimic.

Volatility is computed directly based on the log of price ticks instead of price ticks. Volatility is quite volatile, but it's more regular than price.

[master5]

In the case of high volatility you can use a method called "Scalping".  But this method is a high-risked so I do not recommend using it to newbies. http://en.wikipedia.org/wiki/Scalping_(trading)

[worle1bm]

In the case of high volatility you can use a method called "Scalping".  But this method is a high-risked so I do not recommend using it to newbies. http://en.wikipedia.org/wiki/Scalping_(trading)

The second parentheses in your link is messed up. Thanks for the link, anyway!