Disclaimer: The text below is a press release that was not written by Cryptonews.com.
Trading crypto options offer investors a relatively cost-effective and low-risk solution for trading digital assets when compared to trading perpetual swaps or crypto futures.
A crypto option is a derivative contract that provides its purchaser or holder the right (but not the obligation) to purchase or sell an underlying asset at a specified price at (or in some cases – before) the expiration date.
There are two different styles of crypto options in financial markets globally – American and European. In the American option, a buyer gets to exercise the contract at any time before the expiry date. On the other hand, in European options, the buyer can only exercise the contract at the time of expiry.
However, the world does agree on there being only two types of options: The call option and the put option. A call option grants the right to buy the underlying asset, whereas put option grants the right to sell the underlying asset.
Similar to other derivatives, crypto options are contracts that allow crypto traders to speculate on the coming future price of an underlying asset, and they can be settled in either cash (USD) or actual crypto such as BTC, ETH, etc.
Let’s explore why you should be trading crypto options over other instruments. For the purpose of this post, we’ll take Delta Exchange as an example. Delta Exchange, for those unaware, is a fairly popular crypto derivatives trading platform that offers several unique features and products, including options chains on Bitcoin and Ether along with daily options on XRP, LTC, ADA, and more. It’s worth
Delta offers two types of options contracts on their platform, which are:
- Vanilla Options: Delta offers call and put options on BTC, BNB, ETH, and more, all of which are European options available for several strikes and expiry dates.
- MOVE Options: These types of options are a direct way to speculate the volatility of the underlying crypto assets.
Now, coming back to why crypto options are appealing. Well, because they offer trading traders opportunities to trade big blocks of cryptocurrencies without dealing with big financial commitments. Here are 4 important reasons why they should be your next trading instrument:
Maximize Crypto Volatility
Most cryptocurrencies are, without any doubt, fairly volatile. Traders need to account for the volatility when they open positions. In fact, Investors and traders actively look for hedging solutions that take advantage of this volatility using intelligent speculation, and crypto options are the best solution that caters to this need. Options are extremely low-margined trading instruments, and the result of this is quite visible when high volatility is observed, allowing traders to hedge and speculate fairly well.
Higher Returns
Volatility increases the difference or skew in bullish and bearish bets in various different cryptocurrencies like Bitcoin and Ethereum, which increases the investor demand for crypto options in the market.
This is because the higher fluctuations in price movements of these cryptocurrencies offer greater returns from the crypto options that are being traded. Crypto options, due to their inherent nature of hedging against volatility, provide better returns and profits to traders.
Greater Exposure
As of early 2022, the popularity of cryptocurrencies has only increased, with newer and more promising crypto coins joining the big picture every now and then. Popular crypto figures like Michael Saylor, Elon Musk, and many others have publicly endorsed and invested in cryptocurrencies.
Combined with weakening global and crypto being a natural hedge, crypto has seen a massive surge in its demand. With every bullish run, there is a massive demand for hedging and speculatory tools, and these tools are best used for crypto derivatives like options on exchanges.
Additionally, with the rapid and ongoing developments in the DeFi space and other similar avenues that are progressing, the crypto options market is set to be in an even bigger spotlight than before, offering more exposure to interested traders and investors.
No SWAP Costs
Swap cost is the amount of money you pay for holding a position overnight and is formed based on the interest rates of exchanges whose cryptocurrencies you trade.
Now crypto options do not charge this swap cost when being traded, saving traders from worrying about this expense when holding a position. Delta Exchange charges no swap costs on all of their crypto options, such as vanilla options, MOVE options, and turbo options.
Why Trade Crypto Options On Delta Exchange?
While you could technically pick from a few other platforms as well, there are many innovative features that stand Delta Exchange apart from its competitors, such as:
- Cryptocurrency Settlement: All contracts on Delta are settled in crypto, which means that all the trade profits, losses, and trade settlements are calculated and settled in cryptocurrency terms.
Currently, Delta Exchange has two types of crypto contracts – Bitcoin settled contracts that are margined and settled in bitcoin & stablecoin settled future contracts that are margined and settled in USDT stablecoin.
- Manage or speculate risk: Delta’s futures contracts can be used to trade both rising and falling markets, meaning both long and short, either profitably or in order to hedge price risk.
- Leverage: All of the derivative contracts that are traded on Delta have built-in leverage with a maximum allowed leverage of 200x that varies from contract to contract. This means that, say, for 1 BTC, you can take up to a position of 200 BTC.
Once you create an account on Delta Exchange, you need to fill your trading wallet with either BTC, ETH, or USDT in order to start trading options, futures, or interest rate swaps with BTC and 50+ altcoins.
Sign up now on Delta in 30 seconds and enjoy a smooth and seamless trading experience!