One of the most fast-developing instruments to earn Bitcoin is options trading. Although it grabs the attention of traders, some still consider it as an illegal way of making profits.
Bitcoin could be one of the most brilliant inventions in the electronic payment field. But at its infancy stage, nobody would guess that it would become one of the most profitable assets in the world. But that’s what it is: despite the pandemic, Bitcoin remains the best performing asset with a YTD return of 30.23%.
So naturally, brokers employ different financial instruments to make earning profits with Bitcoin possible, among them the most fast-developing one is options trading. This new form of instrument attracts the attention of traders all over the world, but some have raised concerns that options trading is a scam. In this article, let’s go into this issue and see how traders can make profits with options trading.
Why Do Some People Believe Options Trading is a Scam?
Many people argue that options trading is just another form of gambling because traders earn profits by predicting which direction the price will go at a certain period. If your prediction is right, you can take back your investment plus the revenue the platform promises you; if you guess wrong, you lose your initial investment.
But it is more than that. You need to utilize strategies and skills like traders in other markets. You need to understand the basics of the asset and analyze the market trend. In addition, you will need to manage your portfolio as well as your emotion while trading. So trading options is similar to trading futures, you will need to do homework, not just rely on luck.
Here is how options trading works:
Now the price of Bitcoin is 9349.07. If you think it is going to go up based on your analysis, you first select the expiration time, then enter the trade amount and open a Call option by clicking the green bottom. The “80%” listed on the green bar is the profitability of this trade, and profitability varies from platform to platform. If your prediction is correct, you will get a 180% return.
One big concern relating to fraudulent options trading platforms is identity theft, as some platforms are reported to have collected the personal information of customers. So when you choose a platform, always remember to protect your personal data. Besides, a reputable platform is unlikely to contact you via cold calls. So if you get a phone call out of the blue asking you to make a deposit, stay alert and hang up.
Crypto options trading is a good product and is less complicated and time-consuming than futures trading. However, there are unscrupulous platforms out there who are trying to take away your money. So always check the website and company information. If you can, choosing one doesn’t require KYC to protect your personal information.
Where to Trade BTC Options?
There are a variety of reputable platforms for you to choose from. The most famous ones are IQ Option, Bakkt, and IE…