Feeling bullish? Buy a Call option. – Sparrow
If you think that prices will move up, and you want to trade 1 BTC worth of value but do not have 1 BTC, you can buy a Call option and profit from Bitcoin’s volatility.
Why buy Call?
Unlike spot trading which requires full collateral, buying a Call option allows you to participate in the movement of an underlying asset for a relatively small price (Premium Payable) while enjoying leveraged returns.
Here’s a scenario
You are bullish on BTC and expect it to trade above $11,000 on 27 March 2020
You can buy a Call for 1 BTC with Strike Price at $11,000, Settlement Date on 27 March 2020
The cost for making this position will be 589.99 SP$ (Premium Payable)
How do I profit?
In order to profit from your buy Call, BTC will have to trade above your Breakeven Price at Settlement Date
Breakeven Price is calculated as [Strike Price + Premium Payable]
In this scenario, Breakeven Price will be $11,589.99 (11,000 + 589.99)
The higher BTC trades above your Breakeven Price at $11,589.99, the greater your profit. Technically, your profit is unlimited
However, if BTC trades below $11,589.99, your maximum loss will be limited to your Premium Payable (589.99 SP$), even if BTC goes to $0
Learn more about how you can boost your trades with options in any market conditions:
DISCLAIMERThe information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.Sparrow does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.To the maximum extent permitted by law, Sparrow disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.Content contained on or made available through any of our communication channels is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on any of our communication channels is at your own risk.
Published at Tue, 11 Feb 2020 06:06:31 +0000
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