Options and Other Derivatives

8 min readarticleIncludes quiz · 3 questions

Options give you the right — but not the obligation — to buy or sell Bitcoin at a specific price. They can protect your portfolio (like insurance) or express a directional view. They can also expire worthless.

Options give the right, not the obligation, to buy (call) or sell (put) Bitcoin at a set price by a date. They can hedge risk or generate income but are complex.

Simple definitions:

  • •Call: Right to buy.
  • •Put: Right to sell.
  • •Premium: Price paid for the option.
  • •Strike: Agreed price.
  • •Expiry: Last day the option is valid.
Key Takeaway

Options are sophisticated instruments. A protective put caps your downside. A covered call generates income on Bitcoin you already hold. But if you are new to investing, master spot buying and DCA before touching options.

Test Your Knowledge

3 questions · Passing score: 75%

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