How Beginners Can Get Started with Bitcoin BTC Options#
Many people may find the term "options" to be "complex" or think that "only professional traders can operate it" when they first encounter it. However, once you understand its underlying logic, you'll find it to be a rather simple tool. Options are essentially a derivative tool, and their uniqueness lies in the ability to design profit and loss curves in advance. I will outline the advantages of options using a few key terms.
Flexibility#
The first key term is flexibility. Spot and futures are essentially linear profit tools, allowing only long or short positions. But options are non-linear; they support both long and short directions and can also be used for risk management. The core of options trading is trading "rights," "obligations," and "time." For example, if you want to buy BTC at $115,000 in a month, this "right" can be priced, forming a call option. Conversely, the right to sell BTC at a specific price is a put option. Therefore, options involve four-party transactions (the buyers and sellers of calls and puts), allowing for flexible strategies, such as holding a spot while buying a put, which is akin to adding insurance to an asset.
Asymmetry#
The second characteristic is the asymmetry of returns. The returns from spot and one-time futures contracts are linear; if the price rises by 10%, the return is 10%. But the leverage of options is variable. In a surge of Ethereum, I have seen clients achieve returns of 30 times (3000%). If you buy an out-of-the-money option, it’s like a low-cost lottery ticket; if the market fluctuates dramatically to reach the strike price, the returns could be tenfold, twentyfold, or even higher.
Controllable Risk#
The third characteristic is controllable risk. High-leverage contracts can affect sleep; you might wake up to find your position wiped out. But as an options buyer, your maximum loss is limited to the premium paid, which is a controllable cost like a deposit. As a seller, if you do not excessively naked sell, combined with spot operations, it resembles hedging, providing stable cash flow returns.
Profit and Loss Plasticity#
The fourth and most attractive feature is the plasticity of profit and loss. Linear products require precise predictions of market direction, but markets often operate in volatility and ambiguity. Options traders can benefit from this because they do not need to predict exact price points; they only need to judge the general direction or range (e.g., "the price fluctuates between two points" or "will not reach a high"). By constructing different strategies, they can profit in the "ambiguous correctness."
In summary, the four core characteristics of options are: flexibility, asymmetry, controllable risk, and profit and loss plasticity.
In 2024, I focus on Bitcoin (BTC) trading. It is difficult to outperform BTC by trading altcoins.
By concentrating on BTC and employing various strategies, I achieved fourfold profits in BTC terms. Key strategies include:
First, executing large-scale spot swing trades with an annualized return of about 60%.
Second, implementing contract grid trading during volatile markets based on market cycles, with a monthly return of about 15%.
Third, applying options strategies at different stages: earning premiums as a seller during sideways markets, using combination strategies to hedge against downside risks when price points are uncertain, achieving annualized returns in both bear and bull markets.
The combination of these three methods significantly enhanced BTC-denominated returns.
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Related Reading#
2025 China's Top Ten Virtual Currency Trading Platforms Latest Ranking is Out 🔥【Worth Collecting】
【Real Stories of Wealth in the Crypto Circle】 Many people ask me how I went from 0 to 11 million and then to a debt of 100,000 over the years of trading coins?
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