What is crypto options trading?
Crypto options trading is a new way for traders to make money on the exchange. The essence of investing is to predict the rise and fall of a coin.Crypto options trading with high payouts is offered by Binomo broker.
Crypto options trading assumes a deposit.
Before you start trading the best cryptocurrencies on binary options, choose a trading instrument. The list of exchange-traded instruments includes currencies, stocks, precious metals, energy assets and cryptocurrency. The last group of assets is the most interesting.
With the help of the moving average you can see the moment when the prices make a strong impulse in the direction of growth or decline, and the RSI signal will serve as a confirmation for entry. If the trend remains as it has been, the trader will close the trade on the plus side. It is when the price crosses the moving average and the 50 RSI line that a trade should be made in the appropriate direction.
Icons – Information Traders who like to trade on the trend are advised to take a closer look at the crypto-index, the direction of which changes quite rarely, which allows you to earn on the strategy proposed above. Professionals advise to work on the timeframe M5 using the expiration time of 15 minutes.
Crypto options trading in financial markets offers unlimited opportunities to make money: you can make a profit on the rise and fall in prices.
Binary options trading crypto currencies offers high earning potential for traders of any qualification. The cryptocurrency market now resembles Forex in the early noughties, when even the most primitive trading strategies brought tangible income. Today we will look at what opportunities binary options trading crypto currencies and how you can make money on it.
IQ option has the entire list of cryptocurrencies
If long-term investments in crypto is a strategy, which is stretched in time and probably will bring profit only in some years, on binary options it is possible to receive the income in a minute.
Technically, binary options trading crypto currencies are structured just like any other options. The main difference has to do with the lack of regulation of the cryptocurrency space. At the moment, many leading financial institutions consider digital currencies to be new, untested and unstable. As a result, binary options trading crypto currencies – including options – remains largely outside of the investment and financial mainstream.
An option gives an investor the right to buy or sell a cryptocurrency at a predetermined price within a certain period. Importantly, an option does not obligate you to buy or sell, but gives you the ability to make a trade at any point prior to the expiration date.
In traditional financial markets, options are used to limit risk and make profits. When trading binary options trading crypto currencies, buyers hope that the price of the asset will rise or fall before the due date. Importantly, potential losses are limited to the amount of premium paid.
Key features of crypto options trading:
– Exchange contracts for crypto options trading technically do not differ much from the usual currency pairs or securities.
– Crypto options trading is characterized by high volatility and chaotic mobility, which creates a risk of large losses and the possibility of equally large profits.
– After the deafening “collapse” that came at the beginning of 2018, the sequence of crypto options trading “bulls” strategy no longer works.
– The so-called “signals” or recommendations, which crypto options trading today, are often a fiction and a way to make money on the trust of beginners.
How to start crypto options trading?
Familiarity with market terminology, varieties, history of leading cryptocurrencies:
- Choosing a platform for binary options trading crypto currencies. It is desirable to register on several large platforms that have a positive reputation of responsible brokers.
- Study of binary options trading crypto currencies with an assessment of the opportunities provided by the various options and functionality.
- Choosing specific cryptocurrencies to work with a preliminary analysis of the rate dynamics of each of the leading assets of this category.
- Determining the optimal moment to enter options trading on crypto currency by opening an order and obligatory placing a stop loss.
- Tracing the rate movement, while waiting for the appropriate moment for transaction completion.
- Closing of a position on a profitable point.
The first way to make money on this financial asset is to start issuing Bitcoin yourself. This will require special equipment worth at least 3000 USD and a lot of time to solve algorithms. The maximum you can get in this variant is an income of up to 20 USD per day. The second way to start direct trading of assets on the exchange market – given the value of 1 Bitcoin at the level of 1200-1300 USD, this kind of investment activity will require huge financial assets, but the income can amount to several thousand percent for a short period of time.
If you are determined that it is time to start trading cryptocurrency, make every effort to be financially secure. Only risk what you can afford to lose, make a trading plan and stick to your strategy.
The pros and cons to crypto options trading
Options allow you to speculate on the future price of an asset by paying a small premium. If your prediction comes in, you can buy or sell the asset at the strike price of the option contract, meaning you make money.
If this does not happen, you will simply lose your premium. Thus, options trading on crypto currency is an ideal mechanism for gaining access to financial markets with low risk and high reward.
That being said, options trading on crypto currency is much more complicated than buying and selling traditional asset classes, so it is important that you know what you are doing before you part with your money.
- There is no need to have a wallet to store currency, and there is no need to study other specialized information. Indeed, crypto options trading through a forex broker frees you from the need to study a lot of technical literature. All you need is the ability to analyze charts, acquired on Forex currency pairs.
- A single trading platform allows you to trade all assets at once, both forex and crypto. Exchanges, in turn, provide the opportunity to crypto options trading only cryptocurrencies.
- The availability of leverage allows you to reduce the starting capital. When you trade cryptocurrencies through forex brokers, you get the same leverage as you would with regular forex trading. For example, you can buy 1 bitcoin with only a fraction of its value.
- Options trading on crypto currency through brokers that have been proven for years than to trade through crypto-exchanges. We will talk about the risks of trading through the latter in the following sections of this article.
- Trading costs will usually be higher when compared to trading through exchanges directly. For example, different brokers have a bitcoin spread starting at $9.
- Often the origin of the quotes is unknown, which may well be different from what you see on other exchanges. That said, in disputed situations, you probably won’t be able to prove anything.
- In some cases there is no weekend trading.
If you compare the pros and cons to crypto options trading there are more pros and if you have long wanted to try yourself in cryptocurrency trading then now is the right time. Cryptocurrency trading is a profitable business. The exchange rate of digital currencies can fluctuate by tens of percent per day, and therefore capital can increase daily as a result of successful transactions. The reward a cryptotrader receives for his work depends entirely on himself – how successful his investment strategy and successful transactions will be, the higher the income will be.
One of the most important tasks of an investor is to ensure safe storage of their investments. Web wallets are the most popular among novice users and active traders. They are usually offered on the websites of major cryptocurrency exchanges, can store any currency purchased, and help quickly sell it or transfer it to other users. However, storing large sums of money in web wallets is not safe, as there is always the risk of hacker attacks that could result in assets being stolen.
The key to a successful career as a binary options trading crypto currencies is sufficient practice of making trades. Only experience combined with solid knowledge of the fundamentals gives you hope for stable profitability over a long period of time. However, to gain practical experience you need to make trades and the inevitable losses at first can be avoided by practicing for beginners in demo mode.
For many traders, a demo trading account is an absolute necessity. It not only allows them to understand how the platform works, but also allows them to use different settings and different reports. IQ Option also offers a demo account for beginners. Unlike other platforms, the demo account here is not limited in time. Users can use the platform and get used to it as much as they like, test trading strategies and new trading features.
When you choose the right crypto exchange for you, you have to register on it. Usually, the procedure itself is quite simple and similar to registration on any website – you need to specify basic data about yourself and e-mail. Some exchanges allow you to use their services after that, but you have to go through KYC procedure for full-fledged trading.
Options trading on crypto currency in the demo mode online is exactly the same as trading on a real deposit. The same assets are available to the speculator and the same amount of compensation is offered, which is very convenient for further conversion to a real account. You will not have to change anything in your work in the market by switching from demo to real.
The web platform offers all popular technical indicators such as moving averages, Bollinger Bands, MACD and RSI. New features are added to the platform from time to time. Most recently, a feature called “Position Replenishment” has been added, which allows the trader to keep a trade open if it is close to a stop loss. Overall, the web platform is well designed and offers quite a bit of detail at a glance for options trading on crypto currency.