Explain crypto options to me
Explain crypto options to me
So I was learning a little about the “world’s largest crypto options, and futures exchange” how they call themselves, and even speed-read their tutorial about options.
I do understand the basics of options trading, but there is one thing I still don’t understand: why options?
“limited risk” can’t be the main reason to trade options. I get that stop losses aren’t the most secure guarantee that your risk is limited, but they do work in most cases.
for “leverage” you don’t need options either.
what is the main advantage of trading options? or would it be the main use case?
someone experienced with them could give me a hint?
It depends on what “limited risk” refers to. Limited risk in comparison to equities can be correct (depending on the market situation), and of course also in comparison to high-risk trading with leverage.
In comparison to standard crypto trading, however, I almost doubt it, as in addition to the exchange fees, there are also fees for the options themselves. So you have to get out much better with the options trades to achieve a comparable profit.