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Author: Admin | 2025-04-28
Consult with a qualified professional before making any financial decisions. Options Are Riskier Than Spot Trading Trading Bitcoin options is generally riskier than buying and selling Bitcoin in the spot market. For example, suppose you buy a call option on Bitcoin with a strike price of $35,000 and an expiry date that is three months away. If the price of Bitcoin doesn’t surpass $35,000 by the expiration date, you will lose the options premium (the price you paid for the option) in full. Options Are More Complex Than Spot Trading When trading Bitcoin options, the price of Bitcoin is not the only factor affecting the value of options contracts. There are several key factors that affect the value of the options you buy or sell, but time decay is by far the most critical. That’s because as the time moves closer to the expiry date, the value of an options contract decreases because the time remaining to trade or exercise the options diminishes. The Bitcoin Options Market Is Less Established While Bitcoin options can be found on traditional securities exchanges, like the Chicago Mercantile Exchange (CME), and on dedicated crypto trading platforms, the BTC options market is still quite young and doesn’t have the deep liquidity found in mature options markets. This can affect price slippage, especially in options with longer maturities. How to Trade Bitcoin Options Trading Bitcoin options is different from trading spot Bitcoin. Not only is the risk profile of your trade completely different, but there is a range of different aspects to consider when looking at which Bitcoin options contracts to buy or sell. Before you can start trading Bitcoin options, you need to sign up with an exchange that supports crypto derivatives. If your online brokerage account provides you with access to the CME, you could trade Bitcoin options on the leading securities exchange. For most private investors, however, the more likely choice will be to sign up with a digital asset exchange that offers Bitcoin options trading, such as Bit.com, Bybit, Deribit, or OKX. Here’s how it works. Step 1: Sign Up for a
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