Topic: What is the difference between Bitcoin options and cryptocurrency futures? (Read 216 times)

Maths are certainly very interesting but don't forget you're here in the beginners section.
People just need to understand the basics, ie options are bettings on the asset price against a strike price at an expected date. You have to buy call options at a price lower than the gap you expect between the strike price and the market price if you think the market price will be higher than the strike price and you have to buy put options if you think the strike price will be above the market price, at lower price than the gap you expect too. And as for bettings, if you lose, you lose all your bet, like a liquidation in margin trading.

As I said, I am going to write a write a post on the subject.
Given the fact it’s an highly technical content, with lot of maths and complexity, I am trying to figure out the best format to do so.
Bear with me!

It doesn't explain the options so it's not really useful to the OP. Most of people knows what futures are, but options are far less known by people.

I was reading about Nassim Taleb biography, he made lots of money in financial crisis, especially in 87, 2000 (dotcom) and 2008 (subprime).

I was reading Fooled by Randomness. I will take a look at black swarn too. Interesting guy.

“Fooled by randomness” is a great book, even if you are not going to trade a single financial option in your whole life.
Of course a lot of people think NNT built a career on that hit, but in reality the same  seminal approach can be found in earlier, more technical works, or even in his trading career.

Sure, write a thread about it! I know just the basics, but I never paid much attention to it and I would like to know more!

Recently I discovered some interesting writer, Nassim Taleb who was an options trader. He talked much about it in the book I was reading (but not how it works, more about his ideas).

Hey,
I came into this thread almost by chance and I saw my thread on futures was cited!

Yes, it’s all about futures, and nothing about the options. Writing one on the options would be much more complicated, and I don’t know if I really can explain such a difficult topic on just a single thread. I am munching something, as I see here and there there are a lot of misconceptions about options.

But, yeah, you are right: that is one of the way you can use options. Basically an options, specifically a call options gives you the right (but not the obligation, as a future) to buy the underlying assets (bitcoin, in this case) at a set price (8,000, as per your example) before an expiry date.
So yeah, one nice property they have is that you can use options to leverage: instead of buying bitcoin at 8,000 you can buy a single call at 500, gaining 200 if in the money for 700, or you could even spend the full 8,000 buying 16 options (theoretically, you need to spare something for the margins) and gain 200*16=3,200 for a 700 move. So you can use options to leverage your trading.

This is only one of the uses! I wouldn’t say it’s the smartest (what happens if bitcoin stays at 8,000 at expiry?), but definitely a choice!
Yes, I am probably going to write that thread...

Well that's some good sort of advertising asking the question and yourself answering the same with an alt account . However for anyone genuinely having this question. Here is an answer free from any advertisement:

Futures & Options both are derivative contracts which fetch their value from some underlying assets here being Bitcoin. However, a major difference between both of them is that Futures creates an obligation on part of both the persons to buy or sell the underlying asset at a certain date at a prescribed price prevailing on that date. While Options create an obligation on the part of the option seller but not on the part of option buyer as he may choose not to exercise the option if he feels that it may bring him loss. But he must give certain premium to enter such option and have such right to buy. You can read more about it at Investopedia here: https://www.investopedia.com/ask/answers/difference-between-options-and-futures/

I know but to be honest I doubt that OP knows what BTC options and futures exactly are and that is why I tried to share a link which explains at least a part of the subject.

Additionally, in the linked thread is a discussion about BTC options and the differences from futures but the author talks about a separate thread for this subject only I don't know if this is already created.

I am sure that without proper knowledge about both of these products there is no way to answer the OP question or to understand the subject at all.

Very good on futures, but almost anything on Options.

Options are much more complicated, as you will buy the "right" to buy BTC at a certain price in a predetermined date.
For example, you will buy an Option to buy BTC at 8,000 at December 1st for 500 usd. If BTC goes to 7,000 at november 27th, for example, your option will be worth near zero, as nobody will want to buy BTC for 8000 while the price is 7000.

However, if BTC goes to 8700, you will be saving 200, so that option will be worth 700 (at least) instead of 500. That's near 25% gain in your option paper, while BTC was up only about 8%.

This is more or less how it works.

Excellent job on your marketing. But please make it less obvious.

Both of your post histories show that you guys are either controlled by the same person promoting BTC Seer or two different individuals that are promoting BTC Seer. Regardless of which one is the truth, you need to step up your game guys.

Here is the best thread about BTC futures I have read so far on Bitcointalk: Everything you wanted to know about BTC futures but were afraid to ask!.

I think it is very important to understand what BTC Futures are correctly before jumping into the discussion.

It is easy to understand. The so-called “Options” is just guess whether price will rise or fall, but, comparing with “Futures”, it has evident advantage. For example, if you invest in bitcoin futures without excellent price forecast, you will be forcely liquidated in just few minutes. In addition, you have to pay Margin and Trading fee.

However, bitcoin options is totally a different thing, just like bitoffer’s bitcoin option product (BTC Seer) in which there’s neither Margin nor Trading fee, and forced liqudation, and only thing you need to do is guess wether price will rise or fall. And BTC Seer supports various time period(2min, 5min, 15min, 1day), and it means you can play BTC Seer anytime and anywhere, making the best of fragmented time. But as for futures, if you don’t view the chart all day long, any carelessness may result in forced liquidation with high probability.

The last thing is profit. BTC Seer’s profit is much higher than Futures sometimes, and the reason is that futures’ profit is mostly rely on leverage, and if you invest futures with low leverage, the profit will be low too. Whereas, BTC Seer(bitcoin options) can reach the high-level profit without leverage. For example, Bitcoin price is 10000 USDT and you guess the price will fall. So, you bought a put contract with 5 USDT. As expected, the price fall to 9500 USDT in 5 minutes. After liqudation, you will win 500 USDT, so the principle would be magnified 100 times. This is why people think bitoffer’s BTC Seer is consistent with the trend and “BTC Seer” is due to be launched in late October.

What is the difference between Bitcoin options and cryptocurrency futures?