Topic: 8x profit in a bear market?! - Learn how this trader did it by buying a Put - page 2. (Read 304 times)

True! thanks for sharing~ Do you trade options yourself?

Puts represent the right to sell the underlying asset at a specified strike price at the expiration date. While options can be a powerful weapon in a trader's arsenal ( as you can see in the OP) it requires a big learning curve if you want to do it professionally. Being a derivative product it needs at least basic technical analysis and risk management principles to be viable. So guys please be careful if you want to get into the options endeavour 

nice! I like how buy put carries less risk than short. However, personally sometimes I think twice about buying options cause I dont like the feeling of "paying upfront" for the small sum of premium (altho I know I may lose more shorting lol)

8x profit in a bear market?!



Just last week, a Sparrow user shared his profitable trade with our Telegram community - https://t.me/SparrowExchange. How did he manage to do it?

Here’s a screenshot of his trade:



- User bought a Put on 1 BTC with Strike Price at $9,750
- Settlement Date was on 27 September 2019
- The cost for making this position was 210.93 SP$ (Premium Payable)
- BTC settled at $8,056.2
- Pay off at the end of settlement was 1,693.8 SP$


What’s his profit?

[ (Strike Price — Settlement Price) — Premium Payable ]

[ (9,750–8,056.2) — 210.93 ]

= $1,482.87

The cost of the trade was just 210.93 SP$, for a payoff of 1,693.8 SP$. That’s over 8x profit!

Now who says you can’t win big in a bear market?



Feeling bearish? Buy a Put option.

If you think prices will move down, and you want to short the market but worry about forced liquidations or do not want to deploy your full capital, you can still participate in the market movements by buying a Put option.

Why buy Put?

Unlike spot trading which requires full collateral, buying a Put option allows you to participate in the movement of an underlying asset for a relatively small price (Premium Payable).

This removes the risk of liquidation (which is why it makes sense to buy Put rather than short the market) while allowing you to enjoy leveraged returns.



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