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The Investor’s Guide to Crypto Options Trading

Are you interested in taking advantage of the massive returns offered by crypto options trading but don’t know where to start? Then this guide is for you! We’ll cover all the basics and explain why options are an attractive alternative to regular cryptocurrency investing.

From selecting the right brokerage platform to advanced risk management strategies, you’ll have everything you need for success as a crypto investor. So if you’re ready to learn about how market opportunities can help increase your profits and maximize your return on investments, read on!

Options trading definition and options:

Options offer investors an attractive way to diversify their portfolios and potentially maximize profits while limiting losses. With call options, investors can access the market without liquidating other assets; they only need to make a specific investment at a designated price if the market moves in the right direction. The flexibility of put options allows investors to sell stock without owning it while hoping for a market downturn.

Options trading is also a popular form of speculation and hedging among traders looking to earn on price fluctuations or protect their existing positions from unexpected losses. Whether you are new to investing or an experienced trader, having options readily available in your financial toolbox could prove invaluable.

The crypto options market is ever-expanding, offering crypto payment gateway options in BTC, ETH, and BCH. Institutional and retail investors flock to the most popular pairs of BTC and ETH, yet have also pioneered BCH pairings, while Deribit launched their innovative SOL pairs in 2022.

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The crypto options market is predicted only to continue to expand in the coming years, with many advocates believing that adopting more mainstream crypto payment Gateway pairs will provide unparalleled investment and hedging opportunities for traders.

How crypto options differ from traditional markets

Crypto and stock options trading is similar, though there are minor differences to be aware of. For one, crypto markets never close, whereas stock markets shut down on weekends and at 4 pm EST on weekdays. Secondly, buying crypto options can often involve higher premiums due to implied volatility.

This may push up the costs of a trade, but it also increases profit potential significantly – take the case of the trader who made a paper profit of over $4 million from a $638,400 trade-in 2020! It shows that paying more attention to volatilities and premiums could lead you to impressive crypto and stock option trading profits.

Inversed vs. USD-denominated options

In crypto options trading, how quotes are structured can impact investors’ understanding of the trade. Traditionally, most investors have traded inversed options that are quoted in tokens. Still, due to this system’s complexity–especially when calculating profit or loss – is pushing boundaries and introducing USD-denominated options in July 2022.

This system allows investors to calculate their gains or losses more accurately and fully appreciate how option premiums work as collateral within the Unified Margin system. With’s commitment to providing clearer trading instruments for its market participants, the company is setting a new industry standard for 21st-century financial infrastructure.

Crypto options trading strategies 

Bull markets

Call options:

Buying call options allow traders to cash in on strong bull trends without taking excessive risk. Call options provide a certain level of protection because investors are only risking the cost of the contract premium if they don’t hit their desired strike price.

Prices may rise unexpectedly, and buying call options allow potential buyers to capitalize on these bullish movements by investing strategically. With smart investing and due diligence, using call options may be a worthwhile avenue for relieving trading risks and capitalizing on market trends for maximum reward.

Bear markets    

Put options:

Crypto represents a different investment opportunity in that people can still generate a profit even when the markets are headed down. In such times of doubt, buying put options is smart and provides peace of mind as it ensures you can sell your holdings at your predetermined price.

Consequently, you avoid being exposed to unfavorable price movements, which could lead to further losses when exiting your position. Put options come with leverage, meaning you only need to commit to a fraction of the cost upfront compared to traditional trading practices, making them an attractive and viable option within turbulent markets.

Final Thoughts

Crypto options trading continues to gain popularity and reach, granting investors a new way to manage their portfolios and generate returns. Choosing the right platform, familiarising yourself with unique trading techniques, exercising a suitable risk management strategy, and keeping on top of price developments are all important factors in successful crypto options trading.

Taking the time to plan accordingly, seeking expert advice when necessary, and building connections inside the crypto industry can help take any investor’s trading journey to the next level.

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