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26194963 No.26194963 [Reply] [Original]

can someone explain ETH options trading to me? I opened a call position with a 10k strike price for the 31st of December. It cost me 0.2ETH and it says my position is 2ETH.

Will I receive 2 full ETH if the price of ETH is over 10k at the strike time?

>> No.26195578 [DELETED] 

there's a reason that option was so cheap. Should've went with something more in the money.

>> No.26195699

It should mean you can sell that position now and collect 2 ETH.

I don't know though since I don't do crypto options.

>> No.26196123
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26196123

It means you will receive $1 for every $1 above $10k eth is. so $11k eth means you make $1k.

Is your exchange "European-style options"? That means you can only redeem at the end of the month. you can sell at any time though.

Is your exchange "physically settled"? that means you would need to provide the $10k yourself. so if eth is at $11k, you would need to pay $10k to get that eth that’s valued at $11k (or you can just sell it to someone else for about the same profit.

how many contracts did you buy?

>> No.26196180

>>26196123
sorry should have said "at the expiration date" (Dec 31 for you), not "end of the month". im just used to buying options month-to-month.

>> No.26196418

>>26196123
>>26196180

bought 2 contracts. that's probably what i meant when i said that's my current position lol. it's european style yeah. using deribit. so you're telling me i'm not going to receive 2eth worth 10k apiece if the eth price is over 10k dec 31st? why is it that i can sell anytime? doesn't that make the contract like a futures one but without a liquidation price?

>> No.26197180
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26197180

>>26196418
i havent used derebit (im a burger so it’s restricted to me), but if it says you can receive 2eth it might mean that someone is willing to pay you that much on the open market. eth is pumping right now so it’s probably a good time to sell to the dumb money.

yes the great thing about options is it’s leverage without the risk of liquidation. basically the buyer of the call option makes a lot of money if number go up, but loses it all if number crabs or goes down.

the original seller of the option makes money if it crabs, but also makes money if it goes up (just not as much since the profits all go to the buyer), and loses less if the price goes down.

of course, you can make a lot more money if you just sell your calls to someone else whenever eth pumps, since the fomo in options trading is so strong. i bought some eom bitcoin calls on Jan 1st for $400 that I sold a week later for over $6000 when btc pumped from $34k to $42k. biz is still sleeping on options bc it’s "too hard to understand" kek

>> No.26197270

>>26197180
When you buy calls worst case scenario is they expire worthless right?
>>26194963
What platform is this on bros

>> No.26197391

>>26196418
>why is it that i can sell anytime?
because the originator of the contract had to put his eth up as collateral, but now that you hold the contract you can sell it to another person. these contracts usually change hands a lot before the expiration date. the originator can even buy identical contracts back before the expiration date to close out his position, either at a gain or a loss depending on the market.

>> No.26197493

>>26197391
what platforms can/do you trade options on burgerbro?

>> No.26197585
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26197585

>>26197270
yes, worst case is you lose the money you risked, but you can also sell before the expiration to try and recoup some of your losses, as long as someone is willing to buy. dont buy eth calls right now btw haha, im sure they are hugely overvalued. check the price history or charts before you buy anything.

i use ledgerx bc it’s the only one open to americans (and it’s closed to everyone else). it’s only for btc options though.

>> No.26197659

>>26197180
did you sell your contracts? 0.2eth -> 2eth is a 10x right? i would take it. as soon as eth stops pumping that opportunity will disappear.

>> No.26197663

>>26197585
>dont buy eth calls right now btw haha
Just curious lol, never did crypto options but I'll look into it.
Thanks fren

>> No.26197714

>>26194963
>>26197659

>> No.26197887

>>26197585

How to sell? Just place a sell order equivalent to my position? There's no option to just close position like with futures

>> No.26198495
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26198495

>>26197887
you should be able to buy and sell them just like they are stocks. put a sell order and hope it hits, or sell into someone’s buy order? i can’t even look at derebit from burgerland but there are tutorials. ledgerx show bid and ask prices like a dex, but the screenshots i see of derebit only show averages, which seems like a dumb system to me.

>> No.26198718

theta will kill u

https://btcnu.nl/options

>> No.26198862
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26198862

okay this screenshot makes more sense. yeah, just the same as a cryoto orderbook, set a limit order or sell into someone else’s.

>> No.26199041

>>26198718
time-decay is a factor, which is why it’s best to only use a small part of your stack options trading. i buy options 4-6 weeks away and usually like to get out of my position 2 weeks before they expire. also i can usually trade the spread and make more money than the time-decay loses.