Tristian
New member
f you think that prices will move up, and you want to trade 1 BTC worth of value but do not have 1 BTC, you can buy a Call option and profit from Bitcoin’s volatility.
Why buy Call?
Unlike spot trading which requires full collateral, buying a Call option allows you to participate in the movement of an underlying asset for a relatively small price (Premium Payable) while enjoying leveraged returns.
Here’s a scenario
You are bullish on BTC and expect it to trade above $6,000 on 26 June 2020
You can buy a Call for 1 BTC with Strike Price at $6,000, Settlement Date on 26 June 2020
The cost for making this position will be 1,211.07 SP$ (Premium Payable)
How do I profit?
In order to profit from your buy Call, BTC will have to trade above your Breakeven Price at Settlement Date
Breakeven Price is calculated as [Strike Price + Premium Payable]
In this scenario, Breakeven Price will be $7,211.07 (6,000 + 1,211.07)
The higher BTC trades above your Breakeven Price at $7,211.07 at Settlement Date, the greater your profit. Technically, your profit is unlimited
However, if BTC trades below $7,211.07 , your maximum loss will be limited to your Premium Payable (1,211.07 SP$), even if BTC goes to $0
What are your thoughts on Call Options and Options in general?
Why buy Call?
Unlike spot trading which requires full collateral, buying a Call option allows you to participate in the movement of an underlying asset for a relatively small price (Premium Payable) while enjoying leveraged returns.
Here’s a scenario
You are bullish on BTC and expect it to trade above $6,000 on 26 June 2020
You can buy a Call for 1 BTC with Strike Price at $6,000, Settlement Date on 26 June 2020
The cost for making this position will be 1,211.07 SP$ (Premium Payable)
How do I profit?
In order to profit from your buy Call, BTC will have to trade above your Breakeven Price at Settlement Date
Breakeven Price is calculated as [Strike Price + Premium Payable]
In this scenario, Breakeven Price will be $7,211.07 (6,000 + 1,211.07)
The higher BTC trades above your Breakeven Price at $7,211.07 at Settlement Date, the greater your profit. Technically, your profit is unlimited
However, if BTC trades below $7,211.07 , your maximum loss will be limited to your Premium Payable (1,211.07 SP$), even if BTC goes to $0
What are your thoughts on Call Options and Options in general?