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Author: Admin | 2025-04-28
Used alongside futures to create hedging and arbitrage opportunities that are not possible with other platforms.What To Look For When Choosing A Crypto Options PlatformExercising cryptocurrency options on the underlying asset is becoming an extremely popular trading instrument. However, many traders turn away from crypto options platforms because of the immense choice. To help make the decision easier, here is a list of things to look out for when choosing a crypto options trading platform.Cryptocurrencies. The majority of options platforms start by offering BTC contracts. However, several have now expanded their reach to include several altcoins, such as ETH and SOL. It is important to check which cryptos are supported.Contract type. There are two key types of options trading contracts: (1) European and (2) American. While American contracts can be exercised on any date leading up to the expiry, European contracts on the underlying asset can only be exercised on the expiry date. It is, therefore, important to check which type of options contract is offered by a platform, as it may affect what options strategies can be implemented.Expiration date. Every options contract has an expiration. The expiration date can fall on a daily, weekly, monthly, or yearly basis. However, not all platforms offer the same range of expirations. Remember to check what expirations are offered before committing.Fees. High fees will eat into a strong options strategy. Unlike spot fees, options fees are usually composed of at least 2 components: (1) a transaction fee and (2) an exercise/settlement fee. While the trading fee is applied when an option is purchased, an exercise fee is only required if the option is exercised. Both fees vary from platform to platform.Margin requirements. Although the purchase of the underlying asset through an options contract only requires a premium to be paid, selling options requires a margin. Traders need to be comfortable with the type of collateral that is required for opening options positions. Collateral in the form of digital assets, such as BTC or ETH, may be more volatile than collateral in the form of fiat or stablecoins.KYC requirements. KYC is implemented for the
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