Topic: BitOffer: How to avoid the loss when BTC market fluctuates? (Read 118 times)

Background:
On Dec. 17 the bitcoin price broke below the $6,800 support level and swiftly commenced a tumble to the $6,450 support where it bounced of the lower support of the long-term descending channel.
Many analysts cautioned that if bulls failed to buy into the dip, a price drop below the $6,400 increased the possibility of a revisit to $5,500 to $5,350. Fortunately for bulls, the price bounced off the critical trendline and the digital asset could now be a route to flipping the $7,300 resistance back to support.
But let’s take an overview from Nov 1st to today, the bitcoin price dropped sharply by 22.91%. Most of the traders might already lose much money on the bitcoin trading market. Like what I mentioned before, HEDGE is the most important key to form a smart strategy.
(A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security.)
For example, you hold 1 bitcoin in your wallet. Now the bitcoin price is $7,000, when it drops to $6,000, you will directly lose $1,000. But if you do some hedging works, you will be able to hedge your $1,000 loss. This is the most efficient way to maximize your profit and avoid the loss when holding 1 bitcoin.
If you still feel confused about how to hedge the risk of your trading, bitcoin options trading and BTC Leveraged ETF will be your last and the easiest choice.
BitOffer Bitcoin Options is the most profitable and the simplest bitcoin derivatives which can be used for hedging. The time length of BitOffer Options contracts now supports 2mins, 5mins, 1hour, 4hours, 12hours, 1day, 7days. And it requests 0 fees and 0 margin, which minimizes the budget for hedging. In this article, I will take the 7 days as the sample because once you try it, you will find out that the 7-days contract of BitOffer Options is the perfect one for hedging your bitcoin trading.
Here is a simple math:
From Nov 1st to today, the bitcoin price has fallen by $2113.67. As far as I know, the average quotation for 7-days put contract (Expect the market to be bullish) is $170. And the profit formula of buying put is: The strike price- The settlement price-$170= Your profit when you buy put.
If I have held 1 bitcoin since Nov 1st, and I continued buying 1 7-days put contract, how much loss would I save from the bitcoin price dumped during those 48 days?
And How Much Would I Earn if I continued buying 2 7-days put contracts?
The answer is:
1. If I continued buying 1 7-days put contract, I would only lose the budget I bought the contracts in this period because my loss of holding 1 bitcoin was totally hedged by the put contracts I bought. So, the total loss would be $170*7=$1,190, and the loss I saved is $2113.67-$1,190=$923.67.
2. If I continued buying 2 7-days put contracts, I would earn:
The total amount I would get from my put contracts is $4987.3 (This number is calculated by the bitcoin price spread every 7 days during those 48days.).
The budget of buying put contracts: $170*7*2=$2,380
So, my profit if I continued buying 2 7-days put contracts would be: $4987.3-$2,380-$2113.67= $493.63
In conclusion, when the bitcoin price dumped in this period, as a normal holder, we can use the easiest hedging tool ever, BitOffer Bitcoin Options to avoid the loss and even maximize the profit with only a small amount budget because BitOffer Bitcoin Options requests 0 fees and 0 margins.