Bitcoin options are a type of financial derivative that allow investors to buy or sell a certain amount of Bitcoin at a specific price at a specific time in the future. Bitcoin options trading rules cover many aspects such as trading hours, contract specifications, risk management, etc. This article will delve into the definition, characteristics, trading rules, and related risks and opportunities of Bitcoin options, and will help you uncover the secrets of this highly anticipated financial instrument.

According to data, the CME Bitcoin options market grew 10 times in 30 days and successfully hit a new high. This has made many investors have a strong interest in Bitcoin options. So, what are Bitcoin options? What are the rules for Bitcoin options? Next, the editor of the currency circle will share it with everyone.

 Bitcoin options definition

Bitcoin options (Bitcoin
Option) is a financial derivative instrument based on Bitcoin, which refers to the option that the buyer will own after paying the option premium (referring to the premium) to the seller at a predetermined price (referring to the performance of the contract) within a certain period of time in the future or on a specific date in the future. Price) The right to buy or sell a certain amount of Bitcoin from the seller, but without the obligation to buy or sell. That is, the option buyer has the right to choose whether to exercise the purchase or sale, and the option seller must unconditionally obey the buyer's choice and fulfill the transaction.

It is a financial instrument generated on the basis of futures, which allows 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.

 Summary of Bitcoin options trading rules

Bitcoin options contracts refer to standardized contracts formulated by exchanges that stipulate that the buyer can buy or sell an agreed virtual currency and other subject matter at a specific price at a specific time in the future.

The expiration date of an option contract is the exercise date. The units of option contracts vary depending on the underlying asset. The contract unit of the Bitcoin options contract is 0.01 Bitcoin.

 Bitcoin options operation method

Bitcoin options are the same as spot, which is to predict the future rise and fall of Bitcoin, but support 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.

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.

For example, the current price of Bitcoin is US$7,500. After analysis and judgment, you believe that Bitcoin will most likely fall in the next hour, so you buy a 1-hour put option for 10 USDT.

Bitcoin fell sharply in the next hour, from $7,500 to $7,000. After the 1-hour option expiration system settles, your income is 7500-7000=500 (USD), which is 50 times higher than the cost. If Bitcoin rises in the next hour, you will lose the 10 USDT option principal invested. This is the benefit of options with "unlimited returns and limited risks".

 Bitcoin options advantages:

Low threshold: There is no threshold for Bitcoin options, and options can be played with one yuan.

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.

Through the above introduction, I believe everyone has an understanding of Bitcoin options. Bitcoin options are favored by investors, mainly because there is no threshold for Bitcoin options. You can play Bitcoin options even for one yuan, which is good news for investors with insufficient funds.