Topic: 8x profit in a bear market?! - Learn how this trader did it by buying a Put (Read 305 times)

3 Strategies to Combat Crypto Market Volatility with Options Trading

We have all heard stories of crypto traders losing over 50% within weeks or even days. This is what happens when amateurs do not know how to control risk. Options when used correctly can help you combat crypto market volatility and even profit from it. I am going to share 3 strategies that professionals use daily.
Read more by clicking HERE or the top headline.

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?
Read about it in detail only on Sparrow's Medium page

I dont think OP is trying to Scam anyone. He is just trying to educate people that Options can be profitable and is the way to go ahead, while controlling risks and potentially also improving rewards aspect of it. Options trading in Crypto market is undervalued and OP is trying to shed some light towards it, so more people get to try it. Here are the stats from Coindesk on Trading in general . You can see that only 0.03% of people indulge into options trading in cryptosphere because, as of now, there werent many platforms to do so. Sparrow Exchange fills that void there is.

I totally agree, if the market was that interesting, then there would not have been any need for any of them to actually create such group to make more money by selling signals and getting engaged in all these pump and dump strategies, it is because whatever analysis that they do is not effective that they also resulted to doing what they do.

It is better that we do lots of these analysis personally on our own because this group are never going to operate for the interest of anyone other than for their own interest, so they are just indirectly using everyone in that group to manipulate the market which anything that has to do with manipulation usually does not stay long before it collapses, better we rely on our own strength alone.

if you read the 1st Post i think you don't need skills to trade in this website because all you need to do is just choose what amount you want to protect then choose the strike price and what date you want the settlement

I'm still confused about your exchange works because the basic thing in trading is buy coins when the prices cheap and then sell it when the price high,
but after i saw your tutorial video and this post the users put strike price at 9.7k but the settlement price 8k.
so how he can get a profit if we look it from the basic trading? he buys BTC at 9.7k then settle it/sold at 8k?

Good advise!

But there were people who do really love to embrace risk even if they do know on what extent it can give out.
Remembering these put calls when i do still doing forex trade.I've tried options as well but i can say it is much more riskier yet it do cuts out when the duration had been reached.
Same goes with leverage ones yet they do have the same concept.Earning huge returns on these kind of trades is possible but it does always accompanied with greater risk.

That is too risky for new traders. Without any skills, they cannot make a profit like OP no matter they use big money to buy. It's better to make regular trade at the crypto exchanges like binance, bittrex, and the others than to use option/margin/leverage or whatever. The risk will not worth your money, but if you think you have good skills, then you can do that and see what will happen to your trade. I am sure that we can make a profit from the bear market, but with one condition, we trade with our skills and don't greedy to chase the profit because that will eat your money without stop until you lose all of your money.

- An option gives an investor the right, but not the obligation, to buy (or sell) shares at a specific price at any time, as long as the contract is in effect.
-A futures contract requires a buyer to purchase shares, and a seller to sell them, on a specific future date unless the holder's position is closed before the expiration date.

The risks are higher in Futures contract because the buyer/seller has complete obligation to execute the contract while in Options,  for buyer, there is no obligation where as for Seller, only if the buyer chooses then the seller has to abide by it. In options, you can limit your losses too.

To every beginner out here, please don't trust people that are promoting their telegram group just for you to get "premium" trades. It's all bs. It will just rekt you, trust me. What you are going to do is to research on coins or even study technical analysis for your own good. By this, you might stumble and fall but you can assure that you're the one making your move in trading. Not everybody else.

Check out our latest article! Explains more on the difference between buying a Put vs shorting.

Shorting got you REKT? Try Put options.
https://blog.sparrowexchange.com/shorting-got-you-rekt-try-put-options/

Awesome tip you got there mate! It was proven that even in the bear market, there are ways for us to get profit such as this tip of yours. It’s very critical and difficult nowadays for us to profit during the bear market, but we were proven wrong.

Like this one, it’s something that we need to look from time to time. It reminded me of a Bitcoin trading coach in the Philippines where a handful of his students are enjoying their profits from his “Heikin Touch” techniques for most of the bear market days.

If there’s a will, there’s a way. Even if it’s risky, as long we continue to learn and adjust from our mistakes, we would succeed one day in winning the bear market trading.

I don't really understand the Sparrow Ex platform and the Option Trading, I find it quite similar to the futures contract, What's the difference between these two concepts?

Yeah, Pump and dump telegram groups are evil, trying to manipulate a market isnt ethical. However, I don't think OP is talking about any of those. It is an options trading platform and one of its users had posted his gains from the platform. The OP is just talking about it and how Options trading can be very profitable as well as, to an extent safe way to earn on a volatile crypto market. It is very flexible as well, and you can modify your trades to your liking. Like, you can play it safe and pay some premium and buy options like insurance. You can earn on top of it as well, if the market is in your favor. The other way is how the OP posted above. I am still learning myself, so, I am no expert at it. They arent trying to fool anyone. Do your own research. There are going to be risks involved and the op mentions that as well in the disclaimer that you need to consult a professional in case you are not sure about what you are doing. If you are a trader and looking into Options trading. Might as well check the platform out before coming to conclusions.

For all users, Stay away from telegram groups & don't be fooled by the numbers mentioned above, they sell the illusion. Be careful before sending money for Premium Payable.
No one knows how the price moves up or down, so all these services are based on inaccurate expectations. As long as the predictions are inaccurate it is better to learn how to read market trends rather than pay for unsecured services.
Secondly, why not be free and payments are donations or after gain?

Hello! Thanks for your sharing, great tips!

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

Indeed, especially for beginners, they should read and learn more about derivatives before diving in. We hope to be able to help with some sharings on options trading!

We've included some examples above on the benefits of options trading. Feel free to check it out.

Hello! Thanks for your interest. Here's a short explanation.


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 may make sense to buy Put rather than short the market) while allowing you to enjoy leveraged returns.


Buying Put vs shorting

Scenario 1: Unfavorable - BTC/USD rises in value by 20%

BTC/USD price at start: $10,000
BTC/USD price at end: $12,000

If you paid $1,000 Premium Payable to buy a 1 BTC Put position at a Strike Price of $10,000 and BTC settles at $12,000, your risk from the trade is capped to the Premium Payable.

In comparison, if you short BTC and BTC settles at $12,000 from $10,000, your loss will be $2,000 and potentially much worse, depending on how much BTC rallies.

Scenario 2: Favorable - BTC/USD falls in value by 20%

BTC/USD price at start: $10,000
BTC/USD price at end: $8,000

Likewise, if BTC settles at $8,000 from your 1 BTC Put position at a Strike Price of $10,000, you will profit $2,000, which is a 200% return on your $1,000 Premium Payable.

This is as compared to shorting BTC at $10,000. When the price reaches $8,000, your profit is still $2,000, which is a mere 20% return from your $10,000 position. You also risk your whole capital by placing this trade, as compared to buying a Put option where your risk is limited to your Premium Payable.


DISCLAIMER

The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Sparrow does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.

To the maximum extent permitted by law, Sparrow disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through any of our communication channels is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on any of our communication channels is at your own risk.

Hello! Thank you for your interest.

Please feel free to check out our channels here to learn more
- Youtube: https://www.youtube.com/channel/UCXW1AX7vdgkcIxNaZJFRFwg
- Medium: https://medium.com/sparrowexchange

You can also reach out to us on Telegram, we'll be more than happy to share more about options trading!
- Telegram: https://t.me/SparrowExchange

We are also working on coming up with more educational materials on options so please stay tuned 

Please do not try to tempt innocent traders by showing just one profitable trade. I can show here 100s losing trades which had happened just due to the reason of leveraged trading. I am not against BTC trading but definitely against leveraged and shorting trading. Because, they will multiply the risks into ten fold whereas bitcoin is known for making easy money by simply buying and holding.

Here are my recommended way of trading for the traders who are all in a rush to grab profits:

• Do not expect quick profits. If you still want, losses might be quicker than you could expect.
• Never opt for leveraged trading. Trade only for your actual worth. This way, there will be no pressure of contract expiry.
• Simply buy BTC and forget for some time. Definitely you may get at least 10x profits after the upcoming halving.
• BTC is a proven asset for making easy profits if you buy and hold. So, never go shorting it. Still, you may make use of every dips to buy more.

I'm assuming this "put" option can be done on your "sparrow exchange"? How is "Put" different from shorting a stock and simply selling it now and buying it again at a later time?
I'm not sure I understand the need for additional steps and having an why having a new type of exchange is needed?

I'm thinking this can be simplified like "i sell btc at 9.6k then buy it again at 9k." Does this option mean i get to "bet" 1 whole btc with only $200?

SparrowEx I saw you are the unique source of options for cryptocurrency trading!
I am right?
I have been curious about taking trades on your platform, but I got a problem, it's hard for me to understand options.
Is there any section of your website to learn about options?
thank you.

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.



Disclaimer
The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.Sparrow does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.To the maximum extent permitted by law, Sparrow disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.Content contained on or made available through any of our communication channels is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on any of our communication channels is at your own risk.