Why not use call Options in a bull market?

vennali

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Quote from: wheelz1200 on February 13, 2020, 10:25:10 PM

Quote from: vennali on February 13, 2020, 09:47:54 PM

Quote from: wheelz1200 on February 13, 2020, 08:34:37 PM

Quote from: vennali on February 10, 2020, 07:32:42 PM

~snip~

Because the risk in futures for crypto is very risky whether a lot of money or not it's a risky prop. If there werent risk in it there wouldn't be a possibility for profit. Puts and calls in a more stable environment like the stock market is risky...months in crypto markets are like decades. Pissing in the wind hopefully the right way

Exactly, Volatility helps you enhance profits or safeguard your assets. If you are uncertain about short term, but are bullish on the long term. You could try Options for a duration up to 6 months(at the moment).

I guess, I dont like to bet on crypto futures. It definately has its place in investments it's just not a blanket safeguard for everyone though. It helps to understand how puts and calls work from the get go, it's more advanced than just regular trading.

Indeed, you need a lot of research and knowledge generally to be profitable with Options. It is a great tool for knowledgeable traders in the Options crypto market. I genuinely believe that now is a good time to use call options. I think BTC will go up again slowly. Maybe Long term buy Call?

wheelz1200

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Quote from: vennali on February 13, 2020, 09:47:54 PM

Quote from: wheelz1200 on February 13, 2020, 08:34:37 PM

Quote from: vennali on February 10, 2020, 07:32:42 PM

~snip~

Because the risk in futures for crypto is very risky whether a lot of money or not it's a risky prop. If there werent risk in it there wouldn't be a possibility for profit. Puts and calls in a more stable environment like the stock market is risky...months in crypto markets are like decades. Pissing in the wind hopefully the right way

Exactly, Volatility helps you enhance profits or safeguard your assets. If you are uncertain about short term, but are bullish on the long term. You could try Options for a duration up to 6 months(at the moment).

I guess, I dont like to bet on crypto futures. It definately has its place in investments it's just not a blanket safeguard for everyone though. It helps to understand how puts and calls work from the get go, it's more advanced than just regular trading.

vennali

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Quote from: wheelz1200 on February 13, 2020, 08:34:37 PM

Quote from: vennali on February 10, 2020, 07:32:42 PM

~snip~

Because the risk in futures for crypto is very risky whether a lot of money or not it's a risky prop. If there werent risk in it there wouldn't be a possibility for profit. Puts and calls in a more stable environment like the stock market is risky...months in crypto markets are like decades. Pissing in the wind hopefully the right way

Exactly, Volatility helps you enhance profits or safeguard your assets. If you are uncertain about short term, but are bullish on the long term. You could try Options for a duration up to 6 months(at the moment).

wheelz1200

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Quote from: vennali on February 10, 2020, 07:32:42 PM

If you think that prices will move up, and you want to trade 1 BTC worth of value but do not have 1 BTC, you can buy a Call option and profit from Bitcoin’s volatility.

Why buy Call?

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

Here’s a scenario:

You are bullish on BTC and expect it to trade above $11,000 on 6th March 2020
You can buy a Call for 1 BTC with Strike Price at $11,000, Settlement Date on 6th March 2020
The cost for making this position will be 238.25 SP$ (Premium Payable)

How do I profit?

In order to profit from your buy Call, BTC will have to trade above your Breakeven Price at Settlement Date
Breakeven Price is calculated as [Strike Price + Premium Payable]
In this scenario, Breakeven Price will be $11,238.25 (11,000 + 238.25)
The higher BTC trades above your Breakeven Price at $11,238.25, the greater your profit. Technically, your profit is unlimited
However, if BTC trades below $11,238.25, your maximum loss will be limited to your Premium Payable (238.25 SP$), even if BTC goes to $0

Because the risk in futures for crypto is very risky whether a lot of money or not it's a risky prop. If there werent risk in it there wouldn't be a possibility for profit. Puts and calls in a more stable environment like the stock market is risky...months in crypto markets are like decades. Pissing in the wind hopefully the right way

vennali

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Quote from: bitgolden on February 11, 2020, 12:29:45 PM

I was thinking you would explain "why not to use" instead of "why we should". You have already explained all the reasons why we should use call options if we want to in a bull market. So, I will just talk about why we shouldn't. The biggest reason is ; maybe you are wrong? You think putting up leverage or buying options and basically trying to make more money with the small amount you have?

Well you can, you can make as much money as someone who buys 1 bitcoin and waits by just using 100x leverage by using 0.01 or even lower if I am not wrong, so yes you could make insane amount of profit with just a very low amount. However at the same time, that gives you bigger risk, normally when you can lose 10-50 bucks from a bad trade, here you lose ALL your money when a slight drop happens.

You aren't risking as much as you would in case of Options. You arent supposed to just go all in on 1 trade even if your amount is small, you can space out into multiple trades and react according to market movement and analysis. Some risk assessment is required and for Options, to Protect 1 BTC, you dont need 1BTC. There's inherent leverage on the buy side.Which is another plus point. Also, another advantage of Trading Options is that there's no Slippage.

vennali

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Quote from: rijaljun on February 11, 2020, 10:55:51 AM

Quote from: vennali on February 10, 2020, 10:43:57 PM

Appreciate it. The main aim is to educate people about Options trading and how it could help a fellow trader. Hopefully, I can help someone learn something new which can be implemented and make profits with.

That's good but creating many threads that inform about your exchange look like a spam IMO (cause one should be enough)

However, crypto is highly speculative, that is one big risk and options trading is another big risk. It's double risk and if we talk about reward, that could be so high but look at most traders who are suffering to make money through spot trading, how would they use options and moke money with it?

Wait, I think there's a misunderstanding. I surely have created new topics but it contains different/new information and I have my signature related to the topic.My main aim is to share knowledge and create conversation about the pros and cons of it. I'm not creating threads specifically for the website. The way you say it, it sounds like...if you have a signature, you shouldn't be allowed to make 2 threads because you are promoting that said signature. Regarding trading Options is a double risk, I personally don't think so. Crypto is very volatile indeed, but it cant be profitable with trading. If someone had made trades when I posted this, I think BTC jumped +500$ since. I'm sure it would have been profitable at the moment at least. However, this post is for informational purpose only and should not be taken as an advice. Just a suggestion, if you think we are in a bull market, Options can enhance your profits.There's a lot more to options trading than just making money though. It could be used to secure your assets like an insurance too.

bitgolden

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I was thinking you would explain "why not to use" instead of "why we should". You have already explained all the reasons why we should use call options if we want to in a bull market. So, I will just talk about why we shouldn't. The biggest reason is ; maybe you are wrong? You think putting up leverage or buying options and basically trying to make more money with the small amount you have?

Well you can, you can make as much money as someone who buys 1 bitcoin and waits by just using 100x leverage by using 0.01 or even lower if I am not wrong, so yes you could make insane amount of profit with just a very low amount. However at the same time, that gives you bigger risk, normally when you can lose 10-50 bucks from a bad trade, here you lose ALL your money when a slight drop happens.

rijaljun

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Quote from: vennali on February 10, 2020, 10:43:57 PM

Appreciate it. The main aim is to educate people about Options trading and how it could help a fellow trader. Hopefully, I can help someone learn something new which can be implemented and make profits with.

That's good but creating many threads that inform about your exchange look like a spam IMO (cause one should be enough)

However, crypto is highly speculative, that is one big risk and options trading is another big risk. It's double risk and if we talk about reward, that could be so high but look at most traders who are suffering to make money through spot trading, how would they use options and moke money with it?

vennali

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Quote from: ikicha on February 11, 2020, 04:25:07 AM

Do not to serious guys.

He just want to shiling his site called "Sparrow Exchange", you can see on the picture was redirect to his website. Funny for making a call/put position for a long times need to paying for that.

Thanks for your feedback, I've removed the link but, I'm not sure what did you expect from a banner for Sparrow Exchange? Yes, You have to pay premium to buy call Options but you see that for 1BTC Call Option, you don't need to wager anything even close to 1BTC. In the circumstances explained in the OP, you can make good profits out of it while risking only the initial premium paid. You could try sell Options, Selling call options can enhance your earnings and mitigate against losses. When you sell a call option, you give the buyer the right to buy your crypto asset at the strike price on the expiry date. You will be paid an instant premium that’s yours to keep.

Quote from: XCANA on February 11, 2020, 05:04:23 AM

Quote from: ikicha on February 11, 2020, 04:25:07 AM

~snip~

Thank you for the enlightenment, call option in trade are the most dangerous because, you stand the risk of loosing all your investment, their risk are complex types. They where originally meant for risk management but not when the strategies fail.

Yes, it is a lot more complex than vanilla buying and selling but it is an innovative way to maximize your profits by wagering a much smaller amount. Options trading is generating a lot of interest and this is an informative post on how it could be utilized(look up CME Options). I personally think it is an innovative way to trade crypto.

XCANA

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Quote from: ikicha on February 11, 2020, 04:25:07 AM

Do not to serious guys.

He just want to shiling his site called "Sparrow Exchange", you can see on the picture was redirect to his website. Funny for making a call/put position for a long times need to paying for that.

Thank you for the enlightenment, call option in trade are the most dangerous because, you stand the risk of loosing all your investment, their risk are complex types. They where originally meant for risk management but not when the strategies fail.

ikicha

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Do not to serious guys.

He just want to shiling his site called "Sparrow Exchange", you can see on the picture was redirect to his website. Funny for making a call/put position for a long times need to paying for that.

vennali

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Quote from: squatz1 on February 10, 2020, 10:46:17 PM

Quote from: vennali on February 10, 2020, 10:43:57 PM

Quote from: rijaljun on February 10, 2020, 09:51:53 PM

So, after creating so many threads, basically you want people to use put and call options (or derivative trading) regardless of the market condition.

I know it's a good marketing effort by creating threads regularly to spread and maintain awareness but isn't it hard for you to handle them all?

Appreciate it. The main aim is to educate people about Options trading and how it could help a fellow trader. Hopefully, I can help someone learn something new which can be implemented and make profits with.

Quote from: squatz1 on February 10, 2020, 10:35:11 PM

This is a pretty good and simple explanation of what can happen to you if you're using options.

I'd like to point out to everyone reading this and thinking about using some sort of options, or leverage or anything along those lines. Don't do it, unless you're fully sure what you're getting yourself into. You're most likely going to lose money (if you dont this time, there will be another time and then you'll lose money another time) at some point if you continue to borrow money that isnt yours.

I agree. generally speaking, Options trading is sort of an advance level or trading but there are platforms dedicated to making it simple. Seems like you've had a bad experience or know someone who did. That's trading in a nutshell. There's always an opportunity to make money but if things don't go as planned, You are likely to lose them as well.

~snip~

Disregarding the fact that you're giving your coins to someone else to control (BitMex, your company, etc) you're also going to be risking what you currently have -- is it worth it? That question can only be answered by the individual based on their own risk tolerance.

I appreciate the response and you are right about all of this being 'trading in a nutshell' cause that's not wrong at all. Many can be made rich from leveraged trading, and many poor, but at the end of the day the people making money are those that are providing the lending of funds.

Cool platform though. Site looks nice.

It is not my Company Cheesy

. I wish I had come up with a product like that though. Your approach is passive, buy and HODL but a lot of traders arent that way. Also, you could do that with Options as well. There is long term Options available now, like 6 months. If you are positive that BTC will go on a bull run, especially with Halving in the horizon. It might be a decent shot.

squatz1

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Quote from: vennali on February 10, 2020, 10:43:57 PM

Quote from: rijaljun on February 10, 2020, 09:51:53 PM

So, after creating so many threads, basically you want people to use put and call options (or derivative trading) regardless of the market condition.

I know it's a good marketing effort by creating threads regularly to spread and maintain awareness but isn't it hard for you to handle them all?

Appreciate it. The main aim is to educate people about Options trading and how it could help a fellow trader. Hopefully, I can help someone learn something new which can be implemented and make profits with.

Quote from: squatz1 on February 10, 2020, 10:35:11 PM

This is a pretty good and simple explanation of what can happen to you if you're using options.

I'd like to point out to everyone reading this and thinking about using some sort of options, or leverage or anything along those lines. Don't do it, unless you're fully sure what you're getting yourself into. You're most likely going to lose money (if you dont this time, there will be another time and then you'll lose money another time) at some point if you continue to borrow money that isnt yours.

I agree. generally speaking, Options trading is sort of an advance level or trading but there are platforms dedicated to making it simple. Seems like you've had a bad experience or know someone who did. That's trading in a nutshell. There's always an opportunity to make money but if things don't go as planned, You are likely to lose them as well.

Eh, I think it's more the experience of many that it makes the most sense, in many facets of trading and in Bitcoin up to this point, to just have a passive view of trading. Don't try to get rich on the swings, just buy and HODL.

Disregarding the fact that you're giving your coins to someone else to control (BitMex, your company, etc) you're also going to be risking what you currently have -- is it worth it? That question can only be answered by the individual based on their own risk tolerance.

I appreciate the response and you are right about all of this being 'trading in a nutshell' cause that's not wrong at all. Many can be made rich from leveraged trading, and many poor, but at the end of the day the people making money are those that are providing the lending of funds.

Cool platform though. Site looks nice.

vennali

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Quote from: rijaljun on February 10, 2020, 09:51:53 PM

So, after creating so many threads, basically you want people to use put and call options (or derivative trading) regardless of the market condition.

I know it's a good marketing effort by creating threads regularly to spread and maintain awareness but isn't it hard for you to handle them all?

Appreciate it. The main aim is to educate people about Options trading and how it could help a fellow trader. Hopefully, I can help someone learn something new which can be implemented and make profits with.

Quote from: squatz1 on February 10, 2020, 10:35:11 PM

This is a pretty good and simple explanation of what can happen to you if you're using options.

I'd like to point out to everyone reading this and thinking about using some sort of options, or leverage or anything along those lines. Don't do it, unless you're fully sure what you're getting yourself into. You're most likely going to lose money (if you dont this time, there will be another time and then you'll lose money another time) at some point if you continue to borrow money that isnt yours.

I agree. generally speaking, Options trading is sort of an advance level or trading but there are platforms dedicated to making it simple. Seems like you've had a bad experience or know someone who did. That's trading in a nutshell. There's always an opportunity to make money but if things don't go as planned, You are likely to lose them as well.

squatz1

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Flying Hellfish is a Commie

This is a pretty good and simple explanation of what can happen to you if you're using options.

I'd like to point out to everyone reading this and thinking about using some sort of options, or leverage or anything along those lines. Don't do it, unless you're fully sure what you're getting yourself into. You're most likely going to lose money (if you dont this time, there will be another time and then you'll lose money another time) at some point if you continue to borrow money that isnt yours.

Quote from: rijaljun on February 10, 2020, 09:51:53 PM

So, after creating so many threads, basically you want people to use put and call options (or derivative trading) regardless of the market condition.

I know it's a good marketing effort by creating threads regularly to spread and maintain awareness but isn't it hard for you to handle them all?

Well yeah, that's kinda the intention of anyone that runs a site like this. They're going to make money either way, as they've built in profits for themselves regardless of the market conditions.

rijaljun

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So, after creating so many threads, basically you want people to use put and call options (or derivative trading) regardless of the market condition.

I know it's a good marketing effort by creating threads regularly to spread and maintain awareness but isn't it hard for you to handle them all?

vennali

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#SWGT CERTIK Audited

If you think that prices will move up, and you want to trade 1 BTC worth of value but do not have 1 BTC, you can buy a Call option and profit from Bitcoin’s volatility.

Why buy Call?

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

Here’s a scenario:

You are bullish on BTC and expect it to trade above $11,000 on 6th March 2020
You can buy a Call for 1 BTC with Strike Price at $11,000, Settlement Date on 6th March 2020
The cost for making this position will be 238.25 SP$ (Premium Payable)

How do I profit?

In order to profit from your buy Call, BTC will have to trade above your Breakeven Price at Settlement Date
Breakeven Price is calculated as [Strike Price + Premium Payable]
In this scenario, Breakeven Price will be $11,238.25 (11,000 + 238.25)
The higher BTC trades above your Breakeven Price at $11,238.25, the greater your profit. Technically, your profit is unlimited
However, if BTC trades below $11,238.25, your maximum loss will be limited to your Premium Payable (238.25 SP$), even if BTC goes to $0

Topic: Why not use call Options in a bull market? (Read 160 times)