Bittime - For Bitcoin investors, the confusion about next steps feels very real. Bitcoin price has moved between $58,400 and $63,400 in the last 14 days. There are several issues that make investors feel doubtful, especially regarding regulations in the United States. However, on the other hand, the presence of a Bitcoin Exchange Fund (ETF) with assets above $1.2 billion gives new hope to investors.
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What is Options Trading?
Before we discuss options trading strategies , let's first understand what options trading is. Options trading is a way to invest in Bitcoin without having to directly buy Bitcoin itself.
In options trading, we do not buy or sell Bitcoin, instead we buy a "contract" that gives us the right (not the obligation) to buy or sell Bitcoin at a certain price in the future.
"Risk Reversal" Strategy in Options Trading
One option trading strategy that is quite popular is what is called "risk reversal". This strategy is used to protect against unexpected Bitcoin price changes.
In this strategy, we do two things: first, we buy a “call” option to gain profit if the price of Bitcoin rises, and second, we sell a “put” option to gain protection if the price of Bitcoin falls.
Steps in Using the "Risk Reversal" Strategy
1. Buy a Put Option
The first step is to buy a “put” option to protect yourself from an unexpected drop in the price of Bitcoin.
The “put” option gives us the right to sell Bitcoin at a certain price in the future. By purchasing a put option, we have protection if the price of Bitcoin falls below a predetermined price.
2. Sell a Put Option
After buying a put option, the next step is to sell the put option at a lower price. By selling a "put" option, we can earn money from the premium of the option we sell. The option premium is the price we pay or receive to buy or sell an option.
3. Buy a Call Option
The final step is to buy a “call” option to make a profit if the price of Bitcoin rises above a predetermined price. The "call" option gives us the right to buy Bitcoin at a certain price in the future. By buying a "call" option, we can make a profit if the price of Bitcoin rises.
Also read:
| How to Buy BTC | How to Buy JUP |
| How to Buy ETH | How to Buy DOGE |
| How to Buy PYTH | How to Buy SOL |
Benefits and Risks of the "Risk Reversal" Strategy
One of the main benefits of the “risk reversal” strategy is that we can get protection from unexpected Bitcoin price drops. By purchasing a "put" option, we can protect ourselves from losses if the price of Bitcoin falls.
However, there are also risks that need to be considered. If the price of Bitcoin stays the same or rises slightly, we may lose the option premium we paid to purchase the put option.
Conclusion
In the face of Bitcoin volatility, options trading strategies can be a smart choice for investors. By using a "risk reversal" strategy, we can gain protection from unexpected drops in Bitcoin prices, while still having the potential to profit if Bitcoin prices rise.
However, as with all types of investments, it is important to understand the risks and consider your financial situation before using this strategy.
How to Buy Bitcoin (BTC) on Bittime
You can buy and sell BTC tokens in an easy and safe way via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. BTC is available on Bittime with BTC to IDR and BTC to USDT pairings.
To be able to buy BTC/IDR and BTC/USDT tokens on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of Bittime assets is IDR 10,000. After that, you can make TRX purchases in the application. Complete Guide on How to Buy BTC on Bittime.
Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
What Does Call Options Mean When Trading?
Crypto Options Market: A Place to Trade Digital Options
Buy Bitcoin vs Spot Bitcoin ETF, Which is More Profitable?
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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