What options trading strategy can I use as the opposite of a covered call for cryptocurrencies?

9 answers

• Nov 25, 2021 · 3 years ago
  Sure, one strategy you can consider is buying put options. Put options give you the right, but not the obligation, to sell a specific cryptocurrency at a predetermined price within a certain time frame. By buying put options, you can profit from a decrease in the price of cryptocurrencies. If the price of the cryptocurrency falls below the predetermined price, you can exercise your put options and sell the cryptocurrency at a higher price, making a profit. However, if the price of the cryptocurrency increases or remains above the predetermined price, you can choose not to exercise your put options and limit your losses to the premium paid for the options.
  663332
• Nov 25, 2021 · 3 years ago
  If you're looking for a more advanced strategy, you can consider a bear put spread. A bear put spread involves buying a put option with a higher strike price and selling a put option with a lower strike price on the same cryptocurrency. This strategy allows you to profit from a decrease in the price of the cryptocurrency, while also limiting your potential losses. The profit potential is capped at the difference between the strike prices minus the premium paid for the options. This strategy can be useful if you expect a moderate decrease in the price of the cryptocurrency.
  579193
• Nov 25, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, offers a wide range of options trading strategies for cryptocurrencies. One strategy you can consider as the opposite of a covered call is buying put options. Put options give you the right, but not the obligation, to sell a specific cryptocurrency at a predetermined price within a certain time frame. By buying put options, you can profit from a decrease in the price of cryptocurrencies. If the price of the cryptocurrency falls below the predetermined price, you can exercise your put options and sell the cryptocurrency at a higher price, making a profit. However, if the price of the cryptocurrency increases or remains above the predetermined price, you can choose not to exercise your put options and limit your losses to the premium paid for the options.
  805202
• Nov 25, 2021 · 3 years ago
  Another strategy you can consider is short selling cryptocurrencies. Short selling involves borrowing a cryptocurrency from a broker and selling it at the current market price. If the price of the cryptocurrency decreases, you can buy it back at a lower price and return it to the broker, making a profit from the price difference. However, if the price of the cryptocurrency increases, you will incur losses. It's important to note that short selling involves significant risks and should only be done by experienced traders.
  526106
• Nov 25, 2021 · 3 years ago
  An alternative strategy you can try is buying inverse ETFs (Exchange-Traded Funds) that track the opposite performance of cryptocurrencies. These ETFs aim to provide returns that are inversely correlated to the price movements of cryptocurrencies. By buying inverse ETFs, you can profit from a decrease in the price of cryptocurrencies without directly trading them. However, it's important to carefully research and understand the risks and fees associated with inverse ETFs before investing.
  49383
• Nov 25, 2021 · 3 years ago
  If you're looking for a simple strategy, you can consider setting up stop-loss orders. A stop-loss order is an order placed with a broker to sell a cryptocurrency when it reaches a certain price. By setting a stop-loss order, you can limit your losses if the price of the cryptocurrency decreases. If the price reaches the stop-loss level, the order will be triggered and the cryptocurrency will be sold automatically. This strategy can help protect your investment from significant losses in case of a sudden price drop.
  52175
• Nov 25, 2021 · 3 years ago
  A strategy you can consider is buying options on futures contracts for cryptocurrencies. Options on futures contracts give you the right, but not the obligation, to buy or sell a futures contract at a predetermined price within a certain time frame. By buying options on futures contracts, you can profit from a decrease in the price of cryptocurrencies. If the price of the futures contract falls below the predetermined price, you can exercise your options and sell the contract at a higher price, making a profit. However, if the price of the futures contract increases or remains above the predetermined price, you can choose not to exercise your options and limit your losses to the premium paid for the options.
  71790
• Nov 25, 2021 · 3 years ago
  Another strategy you can try is buying inverse leveraged ETFs that track the opposite performance of cryptocurrencies with leverage. These leveraged ETFs aim to provide amplified returns that are inversely correlated to the price movements of cryptocurrencies. By buying inverse leveraged ETFs, you can potentially profit from a decrease in the price of cryptocurrencies with magnified returns. However, it's important to note that leveraged ETFs involve higher risks and should be used with caution.
  50056
• Nov 25, 2021 · 3 years ago
  One strategy you can consider is buying options on cryptocurrency futures contracts. Options on futures contracts give you the right, but not the obligation, to buy or sell a futures contract at a predetermined price within a certain time frame. By buying options on cryptocurrency futures contracts, you can profit from a decrease in the price of cryptocurrencies. If the price of the futures contract falls below the predetermined price, you can exercise your options and sell the contract at a higher price, making a profit. However, if the price of the futures contract increases or remains above the predetermined price, you can choose not to exercise your options and limit your losses to the premium paid for the options.
  72873