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Author: Admin | 2025-04-28
Pay the option premium.Tips For Choosing A Crypto Exchange For Trading OptionsWhen evaluating crypto options trading platforms, there are several important factors to weigh. You might be tempted to focus on fees and pick an exchange with the lowest fees, but this may not always be an optimal strategy. You should also consider:Options Offered: Not all crypto options exchanges support the same crypto assets. While most support BTC and ETH, only few support other tokens.Fees: Every trade on a crypto exchange has associated costs. Some exchanges only charge transaction fees, while others charge option exercise fees, liquidation fees, and more.KYC Requirements: Know-Your-Customer, or crypto KYC, is a process of identity verification that many exchanges are required to use by law. Most crypto options trading platforms will only allow you to trade options after you’ve provided them with documents to verify your identity.Payment Options: Some exchanges only support deposits in crypto, while others support deposits in fiat currency. Due to conversion and gas fees, it may be beneficial to consider what payment you will be using before picking an exchange.Software Integration: If you want to use an API to make trades, there are exchanges with varying support for automation. Consider this if you’re a more advanced trader.Customer Support: When dealing with a lot of money, you want to be sure that your selected exchange has your back. Some exchanges are known for having great customer service, while others are notorious for the opposite.Crypto Options TerminologyIn The Money (ITM): Options are profitable when they are “in the money.” For a call, this means that the strike price of the option is below the underlying asset’s price — meaning you can make money by buying the asset for the strike price. For a put, this is when the strike price of the option is above the underlying asset’s price — meaning you can make money by selling the asset for the strike price.At The Money (ATM): Whenever the strike price of an option — call or put — is the same as the open-market trading value of the underlying asset, the option is considered “at the money.”Out Of The Money (OTM): “Out of the money” is the opposite of “in the money,” meaning it’s when an option is not a good deal to exercise. This is when the strike price is higher than the underlying asset price for a call option and when it’s lower than the underlying asset price for a put option.USD-Denominated Options: Crypto options can be settled either in the cryptocurrency of the underlying asset (for example, BTC or ETH) or in some USD or stablecoin denomination. Many platforms offer USD-denominated options by default.Covered Call: When selling a call option, the call is considered “covered” if you own the underlying asset. Selling covered calls can be a good strategy to earn option premiums without a lot of risk.Uncovered Call: You can sell a call option without having to actually own the underlying asset. This is a dangerous strategy since, if
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