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Topic: Options trading. What are my risks? (Read 33 times)

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Activity: 163
Merit: 36
December 29, 2024, 02:47:55 AM
#1
I've been reading about Options trading, and now I am doing thought experiment.

Let's say I have 0.5 BTC, and I think on 19 January 2025 the price of BTC will be 120k.
Now, I want to sell Call option that expires on 19 January 2025 at 100k. Because I think that on 19 January 2025 the price of BTC will be 120k and the buyer of Call option will not exercise his options, and I will keep both premium and BTC.

Few questions:
1. Is this how options trading works?
2. If yes, how to determine that price of Call option?
3. What are my risks? (What I am missing here? I understand that I will have to sell my 0.5 at 100k on 19 January if my prediction is wrong and price goes above 100k)
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