StormGain debuts new crypto options
StormGain is happy to announce the debut of an exciting new trading instrument on the platform: crypto options! Now, instead of simply being able to trade cryptocurrencies, StormGain users can place Call and Put option orders based on a cryptocurrency’s potential future price. This means you can trade on the price changes of a digital asset without having to actually own or hold the asset itself. Crypto options are perfect if your main interest in cryptocurrency is to profit from price volatility rather than collect digital tokens.
How do crypto options work?
Options, including crypto options, are derivative instruments that trade on the price fluctuations of the underlying asset. They provide traders with the option, but not the requirement, to buy or sell a specified amount of the asset at the price it was trading at when the contract was initiated. Because you’re not required to buy or sell, this opens up a more flexible trading strategy.
There are two types of crypto options you can buy and trade. One of these is Call options, which give you the right to buy the underlying asset at a predetermined price at any time before a specified expiry date. Similarly, Put options give you the right to sell the underlying asset at a predetermined price before the date.
The price of crypto options is called a strike price, which is influenced by the actual price of the underlying asset, the expiry date, the asset’s volatility and demand for the option.
How can crypto options benefit me?
Crypto options are cheaper than buying the coins outright and allow you to benefit from higher volatility, giving you the potential for much higher returns on your investment. For example, even a relatively small movement on the price of Bitcoin will affect the price of the option by much higher multiples. At the same time, should the future price of BTC not go your way, it’s not possible to lose more than your initial investment in buying the strike price.
Options are great for various trading strategies, such as using long calls (for a bullish approach) or puts (when you predict a bear market) to maximise your profits. More cautious investors can even take both kinds of options on the same underlying asset (known as straddling) or hedge by taking a Put option on their holdings, which compensates for an asset’s potential depreciation.
Crypto options open a wealth of more sophisticated trading strategies that let you use your knowledge of the crypto market to make even more profit. For a more detailed breakdown of how to use crypto options, we recommend that you check out this series of educational articles with examples of Call and Put options and hedging strategies.
Where can I find crypto options?
To trade options on any asset, simply open the StormGain app or web platform and open your cryptocurrency of choice. You’ll see an ‘Options’ tab that shows the strike price and expiry date for each one.
With the introduction of crypto options, StormGain offers yet another way to get cryptocurrency to make money for you. That’s in addition to the best rates on a wide variety of cryptocurrency purchases and exchanges, crypto wallets with up to 12% APR interest, indices and tokenised assets. Sign in to StormGain to see what crypto options can do for your trading profit. Not a member? Then register with StormGain in just five seconds to start trading today!