What are Crypto Options? Definition and example

What are Crypto Options? Definition and examples

Options trading can be confusing. It does not matter whether they are binary options or crypto options. However, the confusion is only in the name of binary options trading. Once you get your trading basics correct, trading options become easier. 

Crypto options are just a part of binary options trading. Binary options have a wider scope. The underlying assets in binary options include major commodities, stocks, indices, cryptocurrencies, etc. 

However, the crypto options have a lesser scope than the binary options. The underlying market in crypto options limits only to the cryptocurrency. 

What is crypto options trading?

Crypto options trading allows traders to trade a set of cryptocurrencies.

Just like the binary options, cryptocurrency also allows traders two rights. 

  • The selling right or placing the put option
  • The buying right or making a call option

The circumstances for winning or losing the trade are similar to binary options trading. Crypto trading is also the game of proposition. Therefore, the traders trading them should have an in-depth knowledge of the crypto market. 

Crypto trading does not impose any buying or selling obligation on the traders. Thus, traders prefer it because of the less baggage and risks. 

However, it doesn’t mean all crypto options will earn you profits. It depends on the market movement and also how you plan your trades. 

Crypto options examples

Examples of various crypto options, including Bitcoin, Litecoin, Ethereum, Binance Coin (BNB) and Tether

There are various crypto options available in the underlying markets. You have to buy or sell rights to trade these assets, but you don’t have an obligation to do so.

Some common cryptocurrencies you can find in the market include the following:

  • Bitcoin
  • Bitcoin Cash
  • Litecoin
  • Ethereum
  • Tether
  • XRP 
  • Binance
  • Ripple

How can you trade crypto options?

Trading crypto options is similar to trading traditional options. 

You can select two or more cryptocurrencies and an online trading platform to trade them. 

Once you decide which broker you wish to trade with, you can start crypto trading immediately. Beginning with crypto trading is simple, and one can fulfill it through the following steps:

Opening a crypto trading account

The opening of a crypto trading account shown by the example of Kraken

Opening a crypto trading account begins when you get in an alliance with a crypto broker. Further, you can open an account by sharing a few personal details and creating a strong password in the broker’s trading platform. In other cases, you can begin trading with a demo account. That comes without even going through the hassle of opening an account. (Learn more about demo accounts by reading our article, explaining the definition of a binary demo account here.)

Choosing the right strategy

Choosing the right strategy when trading with crypto options

Trading cryptos without choosing a strategy is never advisable. The crypto market can see frequent fluctuations. Therefore, a sound trading strategy shall minimize the risks and allows the trader to generate more profits. 

A trader can choose from various crypto trading strategies like Scalping, Moving Average Crossover Crypto Strategy, etc. 

Alternatively, a trader can also prefer to create a customized strategy according to individual trading styles. In either case, the chances of consistently winning increase exponentially.

Placing the trades and winning the profits

Making profits with crypto options trading

Placing the bets with a sound understanding of the market and its movement comes next. Once you place the bet, the results surely depend on the strategy. But your understanding of the crypto market also plays a vital role. 

Therefore, before crypto trading, one must invest time and effort in understanding the crypto trading basics like the exchange rates, trending cryptos, market volatility, etc. That shall help the trader in winning the trades and increase profitability.

About the author

Percival Knight
I have been an experienced Binary Options trader for more than ten years. Mainly, I trade 60-second trades at a very high hit rate. My favorite strategies is by using candlesticks and fake-breakouts