How to Profit Steadily from Crypto Options? A Beginner’s Guide to Hedging and Income Strategies

The operation principle of Crypto Assets Options

Crypto Options refer to contracts that give the buyer the right to buy or sell crypto assets (such as BTC, ETH) at a predetermined price at a future point in time, after paying a “premium”. The buyer has the right but not the obligation to exercise this option.

The key concepts are as follows:

• Premium: The cost paid for purchasing Options, which is also the seller’s profit.
• Strike Price: The agreed buying or selling price in an options contract.
• Expiration Date: The validity period of the Options contract, which becomes invalid after the due date.
• European and American Options: European can only be executed on the expiration date, while American can be executed early.

In simple terms, options provide a way to “book future opportunities at a low cost.”

What are the common yield-type Options strategies?

In the Crypto Assets market, the use of Options is not only for speculation but also for earning stable returns. Here are a few strategies suitable for Newbies:

1. Sell Covered Call Options

When you hold BTC but do not expect the price to rise significantly, you can sell call Options to collect the premium. If the price does not exceed the strike price, the Options expire worthless, and you gain profit.

2. Sell Cash-Secured Put Options

If you want to buy BTC at a lower price, you can first sell a put Options. If the price drops and triggers execution, you can buy at a lower price and also earn the premium in advance.

3. Straddle Strategy

Buy both call and put Options with the same strike price. Suitable for high volatility markets, profits may be gained regardless of price increases or decreases.

4. Iron Condor Strategy

Construct a “profit range” using multi-leg Options, suitable for volatile markets, with controllable risks, and recommended for advanced users to try.

How to use Options to hedge market risk?

One major advantage of Options is their ability for risk Hedging. For example:

• Worried about the BTC price dropping? Buy put options to lock in the lowest selling price.
• Participating in high-risk projects but afraid of a big drop? Buy “protective options” with a small amount of premium to prevent liquidation or excessive losses.

Compared to spot and margin trading, options allow for high returns with a small investment while setting a “safety cushion” beneath the risk exposure.

Introduction to Gate Platform Options Features

As one of the world’s leading crypto trading platforms, Gate provides users with an intuitive and professional options trading experience.

Figure:https://www.gate.com/options/BTC_USDT

The characteristics of Gate’s Options trading include:

• Supports mainstream coins such as BTC, ETH, SOL.
• Provide American and European Options selection
• Limit orders and stop-loss orders can be set.
• Provide income-generating strategy templates (such as automatic selling of call Options)
• Supports USDT margin, no need to hold spot assets
• Integrate simulated account features to assist newbies in practice.