Crypto Options
Derivative instruments giving the right (not obligation) to buy or sell crypto at a specific price.
Crypto options are derivative financial instruments giving the right, but not obligation, to buy (call) or sell (put) a cryptocurrency at a predetermined price (strike price) until expiry date.
Basics:
•Call option — right to buy (profit when price rises)
•Put option — right to sell (profit when price falls)
•Strike price — agreed execution price
•Premium — price of option (paid by buyer)
•Expiry — date until which option is valid
Examples:
•BTC call, strike $100k, expiry Dec 2025
•If BTC at expiry > $100k → option in profit
•If BTC < $100k → option expires worthless (lose premium)
Greeks — option price factors:
•Delta — option sensitivity to price change
•Theta — value erosion over time
•Vega — sensitivity to volatility
•Gamma — change in delta
Implied Volatility (IV):
•Market estimate of future volatility
•High IV = expensive options (market expects large move)
Where: Deribit (leading crypto options exchange), OKX, Binance
Warning: Options are complex instruments, losing the entire premium is possible.