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When it comes to Bitcoin options, investors who know something about Bitcoin are no strangers. Bitcoin options are a financial instrument based on Bitcoin futures. They can also be called Bitcoin index options. To put it simply, The buyer of Bitcoin options has the right to choose whether to exercise the purchase or sale, while the seller of Bitcoin options must unconditionally obey the buyer's choice and fulfill the transaction. Maybe with this introduction, some newbies in the currency circle still don’t know much about what Bitcoin options are. Next, the editor of the currency circle will use this article to give you a simple explanation of what Bitcoin options mean?

 What are Bitcoin options?

Bitcoin options are a financial instrument based on futures, allowing the buyer (or holder) to buy or sell the underlying asset (underlying
asset) rights. The holder of an option can choose to buy or not buy, sell or not sell within the time specified in the option. He can exercise the right or give up the right. The seller of the option is only responsible for the option contract. stipulated obligations.

Bitcoin options, also known as Bitcoin index options, mean that option buyers pay an option premium to the option seller in exchange for buying or selling underlying assets based on the Bitcoin index at a certain price at a certain time in the future. right.

 Bitcoin options advantages:

1. Low threshold: There is no threshold for Bitcoin options, and you can play options with just one dollar.

2. Practical combat: Bitcoin options do not require the accumulation of simulated trading experience. Users can temper and test their trading strategies in actual combat.

Continuous trading: Bitcoin options contracts can achieve 724 hours of uninterrupted trading, and the daily price of Bitcoin fluctuates greatly, with more arbitrage opportunities and stronger practicality.

 How to play Bitcoin options

The gameplay of Bitcoin options is the same as that of spot, which is to predict the future rise and fall of Bitcoin, except that it supports buying up and down. In terms of operation, if the price is expected to be bullish, buy up, and if the price is expected to be bearish, buy down. The profit calculation is the same as that of spot prices. When buying up, you will earn as much as the price rises during the cycle. When buying down, you will earn as much as the price falls during the cycle. In short, it is to use a very small principal to bet on the rise and fall of the future range, so as to obtain high returns.

Take the Bitcoin options launched by BitOffer Exchange as an example. There is no margin, no handling fees, and no exercise required. The biggest feature of this option is that the risk is limited and the returns are unlimited! Regardless of the bull market or the bear market, there is a chance to obtain excess returns of up to a thousand times. It is also the only option in the world that does not require exercise at expiration. The purpose of launching Bitcoin options is to provide investors with precise hedging and additional trading tools.

The Bitcoin options launched by BitOffer have 7 time periods, namely: 7 days, 1 day, 12 hours, 4 hours, 1 hour, 5 minutes, and 2 minutes. Users need to select the corresponding period when placing an order.

1. Call options

For example, the current price of Bitcoin is US$9,000. You think it is likely to rise in the next week, so you buy a 7-day call option, spending a total of US$200. Sure enough, in the next week, Bitcoin will rise by 2,000 US dollars, from 9,000 to 11,000 US dollars. Then when this option expires and settles, you will get a net profit of 2000-200 = 1800 US dollars, and the comparative cost return rate is 900%. .

2. Put option

For example, the current price of Bitcoin is US$10,000. You think it is likely to fall in the next week, so you buy a 7-day put option for a total of US$200. Sure enough, in the next week, Bitcoin dropped by 2,000 US dollars, from 10,000 to 8,000 US dollars. Then when this option expires and is settled, you will get a net profit of 2000-200 = 1,800 US dollars. The comparative cost return rate is 900%.

If it expires and settles after one week and the option direction is wrong, you will lose the principal of the option. It can be seen that Bitcoin options have limited risks and unlimited returns! It is enough to show that options investment is low, risks are small, and returns are high. Therefore, Bitcoin options are suitable for the vast majority of investors, but futures cannot satisfy most investors. Therefore, they are extremely risky, and your position will be liquidated if you are not careful.

Through the above introduction, I believe everyone already has an understanding of the meaning of Bitcoin options. Although the threshold for Bitcoin options is low and you can invest even one yuan, the editor of Bitcoin Circle still wants to remind investors that investment is risky. Don’t invest casually until you can’t bear the consequences. Of course, some risks can be Reduced risks, such as the risk of a trading platform running away or crashing, can be reduced by choosing a formal trading platform.