If you already invest in cryptocurrencies, you know that the market can be a real rollercoaster.
One day you're smiling as Bitcoin flies to the moon, the next you're crying because some whale decided to dump everything and sent the price crashing to the ground.
But what if I told you that there is a way to protect yourself from falls and still increase your profits, without having to sell your crypto assets? I present the options!
Options are derivative contracts that give you the right (but not the obligation) to buy or sell an asset at a predetermined price in the future. They are widely used in the traditional market and, in recent years, have been gaining a lot of space in the crypto world.
And the best part: you DON'T need to have 1 whole Bitcoin to trade! With small fractions of BTC or even altcoins, you can now participate in the derivatives market and multiply your profits strategically.
Also, we're not just talking about BTC!
You can trade options on various cryptocurrencies such as Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and many others.
Example: You think that Bitcoin, which is currently at $98,000, will go to $110,000 in a month. You buy a Call with a strike of $105,000 and if BTC really spikes, you have the right to buy at that lower price, securing a much larger profit than just holding the asset.
Example: You have 1 BTC and are worried that it might drop from $98,000 to $85,000. To protect yourself, you buy a Put with a strike of $95,000. If Bitcoin does fall, you have the right to sell it at a better price than the market, reducing your losses.
But options aren't just for speculation! They are one of the best tools for protecting your assets (hedge) and creating structured strategies with controlled risks.
Hedge with Put: Imagine you have 1 BTC (or even just fractions) and you don't want to sell, but you fear a drop. You can buy a put option and if the price drops, your contract will appreciate, offsetting the loss of Bitcoin. It's like insurance!
Covered Call: You have BTC or altcoins in your portfolio and want to generate extra income. You can sell a Call against your cryptos and profit from the premium received. If the asset takes off, you may lose part of the appreciation, but you already know this.
Straddle and Strangle: Strategies to win with volatility. If you think an asset is going to have a strong movement (up or down), but you don't know the direction, you can buy a Call and a Put at the same time. If the market explodes anywhere, you profit!
Bull Spread and Bear Spread: Controlled risk strategies where you buy and sell options simultaneously to limit losses and gains. Ideal for those who want to bet on the rise or fall without taking extreme risks.
