3 Strategies to Combat Crypto Market Volatility with Options Trading

1. Sell Calls to enhance earnings

You will receive ~$3.00 from the Instant Premium up front and its yours to keep. If the price of ETH falls to $220, the Instant Premium would offset some of the loss. However, if the price of ETH rises to $300, the Instant Premium would boost your profit beyond $50.

The key point is that the Instant Premium is yours to keep regardless. You can treat it as income or use it to buy protection for the portfolio. The next example will deal with protection.

2. Buy Puts to protect your assets

Put options are used to protect positions or to make speculative bets. When you buy a put, you profit when the crypto asset drops in value. You will have the right to sell a crypto asset at the strike price on the expiry date. This is an incredibly powerful tool.For example: Buy a 1 ETH/USD put option with a strike price of $200 for 14 days

3. Collar (Sell Call + Buy Put) for low cost hedging

Disclaimer

The 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.