Doc's Daily Commentary and Watchlist

Mind Of Mav

5 Exchanges You Can Trade Crypto Options In 2022

 

As the crypto market expands, so does the demand for sophisticated trading tools. Options trading has long been a staple of traditional finance, and it is now making its way to Bitcoin and other cryptocurrencies.

But . . . what are crypto options? 

Crypto options are a form of financial derivatives that give you the right, but not the obligation, to buy or sell the crypto at a specific price – called the strike price – on a specific expiry date. For buying an option, you pay a premium, which is usually cheaper than buying the cryptocurrency outright.

An “option” is a type of derivative contract that gives its purchaser the right – but not the obligation – to buy or sell an underlying asset at a set price at (or, in some cases, before) an expiration date. The right to buy the underlying asset is known as a “call” option while the right to sell is known as a “put” option. Unlike buying bitcoin on a cryptocurrency exchange, options allow you to take a speculative position on the future direction of the market price, meaning you speculate on whether the price will go up or down. We teach a lot of this stuff over at https://elite.readyset.trade/

Basically, in addition to improving the market equilibrium by providing arbitrage opportunities, options trading allows users to hedge against risk. They are cost-effective since you do not have to pay an upfront premium while issuing an options contract, and another hidden benefit is that you do not have to exercise the options contract by compulsion; instead you can choose the option of not exercising the contract — fancy that!

However, since cryptocurrency options are relatively new, the market is not as diverse as the options market for traditional instruments. So, let’s explore what’s out there and take a look at five different exchanges that offer crypto options today.

1. BIT.com

Right off the bat, you can trade options like BTC, ETH, and BCH on Bit.com. Trading volume-wise, Bit.com is one of the leading exchange platforms in the ETH and BTC options market. Also, Bit.com has a unique feature known as the Unified Margin (UM) system, which allows traders to use one account without limitations. Ok, so what does that mean?

Unified Margin is an upgraded trading and risk management system, adopting one single account solution to optimally trade spot, margin, perpetual, futures, and options. All collateral cryptocurrencies in the unified account are shared as USDT denominated margin to improve capital utilization, thus lowering the risk of being liquidated. Pretty interesting stuff.

The Bit.com trading platform is web-based and accessible from a plethora of web browsers. The platform is big on user experience as one doesn’t need to download any other apps. Therefore, traders are free to access their accounts and trade from any device available within reach.

The platform offers your basic necessary features and tools, with the most important being the technical analysis tools, advanced trade controls, and Tier 2 market data. 

Fees on Bit.com are split into seven tiers, with maker fees starting at 0.0200% and taker fees starting at 0.0300%.

2. DERIBIT

Deribit is based in Amsterdam, Netherlands, serving the crypto community with its crypto options products since 2016. Deribit provides European-style options, meaning such options can only be exercised at the time of expiration date. Also, the settlement happens in cash instead of the underlying asset.

Deribit facilitates options trading of Ethereum and Bitcoin on its platform where these purchase fees are applicable 0.04% of underlying or 0.0004 BTC or ETH per option contract.

3. FTX EXCHANGE

FTX Exchange Derivatives is a digital currency futures + options exchange & clearinghouse regulated by the US Commodity Futures Trading Commission (CFTC). What that means is that FTX exchange derivatives are available to both retail and institutional investors. In particular, they offer physical settlement of all contracts, block trading, and algorithmic trading opportunities for institutional investors, while giving direct access for all traders. Since launching in 2017, FTX US Derivatives has cleared over 10 million options and swaps contracts, and recently passed Coinbase as the #2 exchange by BTC volume worldwide.

FTX offers trading in only European-style Bitcoin options, which you cannot exercise early. All options are cash-settled in USD on the expiration date. 

The trading fees on the platform are divided into six levels, with maker fees ranging from 0.020 – 0.000%, and taker fees ranging from 0.070 – 0.040%.

4. OKEX 

Designed for more advanced traders, OKeX (now OKX) is one of the leading options trading platforms in the market. Like Bit.com, OKX offers Unified Margin (aka, Unified Account). OKX currently offers a wide range of assets to trade and its low fees make it one of the most sought-after platforms at the moment.

The highest trading fees payable for low-volume accounts are a 0.15% maker fee and 0.2% taker fee. This drops as low as 0.02% and 0.05% for makers and takers fees, respectively, as you move up the volume charts. 

5. BINANCE

The king of crypto.

Binance is the leading global cryptocurrency trading platform that offers a wide range of crypto assets to trade, all while boasting the most liquid market for all assets in both the spot and the derivatives marketplace.

It allows you to trade crypto options through its Binance Futures platform, which was launched in 2020. You can take leverage of up to 125X to trade cryptocurrency futures and options contracts (but please, think of your kid’s future before doing so).

Binance allows buying and selling of European-style vanilla Bitcoin options, which can only be exercised on the contract expiration date. The option contracts are priced and settled in USDT. 

The options trading fee has two parts – the transaction fee and the fee to exercise. 

Transaction fee: Index price * Transaction fee rate, i.e., 0.03% of the underlying asset value

Exercise fee: Exercise price * Fee to exercise rate, i.e., 0.015% of the underlying asset value 

The fee amount will not exceed 10% of the transaction fee, and in the exercise fee, the fee amount will not exceed 10% of the profit gained by exercising the option.

 

 
 

The ReadySetCrypto "Three Token Pillars" Community Portfolio (V3)

Add your vote to the V3 Portfolio (Phase 3) by clicking here.

View V3 Portfolio (Phase 2) by clicking here.

View V3 Portfolio (Phase 1) by clicking here.

Read the V3 Portfolio guide by clicking here.

What is the goal of this portfolio?

The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:

CryptoCurreny – Security Tokens (STO) – Decentralized Finance (DeFi)

With this portfolio, we will identify and take advantage of the opportunities within the Three
Pillars of ReadySetCrypto. We aim to Capitalise on the collective knowledge and experience of the RSC
community & build model portfolios containing the premier companies and projects
in the industry and manage risk allocation suitable for as many people as
possible.

The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.

Our Current Allocation As Of Phase Three:

Move Your Mouse Over Charts Below For More Information

The ReadySetCrypto "Top Ten Crypto" Community Portfolio (V4)

Add your vote to the V4 Portfolio by clicking here.

Read about building Crypto Portfolio Diversity by clicking here.

What is the goal of this portfolio? 

The “Top Ten Crypto” portfolio is a democratically proportioned portfolio balanced based on votes from members of the RSC community as to what they believe are the top 10 projects by potential.
This portfolio should be much more useful given the ever-changing market dynamics. In short, you rank the projects you believe deserve a spot in the top 10. It should represent a portfolio and rank that you believe will stand the test of time. Once we have a good cross-section, we can study and make an assessment as to where we see value and perhaps where some diamonds in the rough opportunities exist. In a perfect world, we will end up with a Pareto-style distribution that describes the largest value capture in the market.
To give an update on the position, each one listed in low to high relative risk:
SoV/money == BTC, DCR
Platforms == ETH, XTZ
Private Money == XMR / ZEC / ZEN
DeFi == MKR / SNX and stablecoins
It is the most realistic way for us to distill the entirety of what we have learned (and that includes the RSC community opinion). We have an array of articles that have gradually picked off one by one different projects, some of which end up being many thousands of words to come to this conclusion. It is not capitulation because we all remain in the market. It is simply a consolidation of quality. We seek the cream of the crop as the milk turns sour on aggregate.

Current Top 10 Rankings:

 

 

Move Your Mouse Over Charts Below For More Information

Our Discord

Join Our Crypto Trader & Investor Chatrooms by clicking here!

Please DM us with your email address if you are a full OMNIA member and want to be given full Discord privileges.