If you have a put option and when the expiration date comes, Bitcoin is trading at less than the put option’s strike price, you can make money by purchasing Bitcoin on the open market for a lower price and selling it through your put option for a higher price. For most option trades, however, underlying assets such as BTC or ETH rarely change hands. Buying a call or put options contract gives you the right to buy or sell an underlying asset. Since the value of the option contract itself is equal to the difference between the strike price and the market price of the underlying asset (such as BTC), most traders will just sell their option position to collect their upside.

In American options, contracts may be exercised before the expiry date. Options give the owner the right to trade crypto at a certain price at some point in the future. For example: If you buy a European call option to buy Bitcoin at $20,000 with an expiry date on November 20th, you are allowed to purchase Bitcoin at a price of $20,000 on November 20th, regardless of what the price of Bitcoin is that day. This price is known as the “strike price.” Call options allow you to purchase crypto at a certain strike price in the future, while put options allow you to sell crypto for a certain strike price in the future.

Crypto Trading Live

ETH for Ethereum options). Stryke is one of the most degen platforms out there and we love them for it. Sure, their fees are higher than other options platforms, but it makes sense- because they’re dealing with coins that have much lower liquidity. If you utilize the auto-exercise feature, a fee of 1% of the profit (PNL) will be applied upon exercise. Stryke offers their options services under a feature known as Concentrated Liquidity Automated Market Maker (CLAMM). 3%-4% of option premium at the time of purchase.

While most support BTC and ETH, only few support other tokens. KYC Requirements: Know-Your-Customer, or crypto KYC, is a process of identity verification that many exchanges are required to use by law. Fees: Every trade on a crypto exchange has associated costs. Most crypto options trading platforms will only allow you to trade options after you’ve provided them with documents to verify your identity. Some exchanges only charge transaction fees, while others charge option exercise fees, liquidation fees, and more.

When you buy a put or a call option, there’s a risk that you may lose the entire options premium (the amount you paid to buy the option). Crypto Options Trading Vs. There are some notable differences, however. By contrast, with spot trading, the asset price would need to fall to zero to see the same 100% loss on investment. Crypto options work much like traditional options for trading stocks.

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