What will be your option play Christmas quiz — Announcement of winners

Congratulations to the winners of our options trading Christmas quiz!

Based on the settlement price of 7,165 USD on 27 December, the correct answer which will generate the largest options payoff is

d) Sell put — Earn $1,200


Winners for options quiz — Win 100 USDT each!

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Reasoning: I am not bullish on BTC but also do not think it will drop below 7.2k (hence selling put for higher premium instead of selling call for higher net gain)

  • Sparrow ID: ********-****-****-****-********4fa0

Reasoning: Assuming present price = settlement price, then it provides the best payoff. The 2nd best payoff is to sell the call, which has the best payoff if price declines below $6,930. The initial price of buying the put option is too high relative to selling it (as at 4pm 26 Dec 2019).

Winners for social media (Twitter RT & Telegram) bonus — Win up to 20 SPO!

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We’ve received divided responses, with only 26% of the participants getting the options quiz right!

Confused about how options work? Here’s a breakdown of the answers.

At a settlement price of $7,165, the trade position which will generate the most ROI based on options payoff will be:

  1. Sell put — gain $365
  2. Sell call — gain $130
  3. Do nothing and HODL — $0 ($165 unrealised profit)
  4. Buy call — lose $180
  5. Buy put — lose $265


Sell put — $365 profit

By selling a put option at a strike price of $8,000, you will receive $1,200 premium.

At settlement price of $7,165, your option will be In-The-Money, meaning that you will need to pay the cash difference of your Settlement price and Strike price to the option buyer. Your premium received can help to offset the cash difference.

Cash difference to pay to option buyer: [Strike Price] — [Settlement price]

$8,000-$7,165 = $835

Profit/loss from trade = [Premium received] — [Cash difference paid to option buyer]

$1,200-$835 = $365

Sell call — $130 profit

By selling a call option at a strike price of $8,000, you will receive $130 premium.

At settlement price of $7,165, your option will be Out-The-Money and you will get to profit fully from your premium received.

Profit from trade = Premium received = $130

Do nothing and HODL — $0 ($165 unrealized profit)

If you do not make any trade and decide to HODL your BTC instead, you will not realize any profit from the trade.

If you decide to sell your BTC at market, you will receive $165.

Profit from selling BTC at market = [Settlement price] — [BTC price at market]

$7,165 — $7,000 = $165

Buy call — lose $180

By buying a call option at a strike price of $8,000, you will pay $180 premium.

Since BTC price settled at $7,165, your call option will settle Out-The-Money. Your maximum loss from this trade will be your premium paid.

Loss from trade: -$180

Buy put — lose $265

By buying a put option at a strike price of $8,000, you will pay $1100 premium.

Since BTC price settled at $7,165, your put option will settle In-The-Money. Meaning that you will receive the cash difference of your Settlement price and Strike price from the option seller. Your profit from the trade will be the cash difference received minus your premium paid.

Cash difference received from option seller: [Strike Price] — [Settlement price]

$8,000-$7,165 = $835

Profit/loss from trade = [Cash difference received from option seller] — [Premium paid]

$835-$1,100 = -$265



Thank you for participating in our options quiz, we hope you’ve learnt more about the benefits of options!


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