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  Pure thrill: Options vs. Bitcoin: What's more profitable for investors? | News | Bit Updates
Home » bitcoin updates » Pure thrill: Options vs. Bitcoin: What's more profitable for investors? | News

Pure thrill: Options vs. Bitcoin: What's more profitable for investors? | News

Sunday, February 18th, 2018 | bitcoin updates

The recent price setbacks that plagued the DAX, Dow Jones and Nikkei225, among others, may have been short bursts in the uptrend. Many investors showed a typical behavior for the bull market and already took the lowest price setbacks to expand their stock positions and buy back. Meanwhile, many experts and investment strategists spoke up, saying that the current price reset is a temporary phenomenon.
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The owners of various cryptocurrencies suffered even more extreme price setbacks. In January 2018 alone, some coins lost more than 50 percent in value. Although it is difficult to determine the fair value of the various digital currencies such as Litecoin, Dash, IOTA, Monero, Neo, Starcoin, Augur, Zcash or Nxt, the crypto-thalers enjoy great popularity. As with options trading on the stock exchange, crypto trading also creates a special thrill for the investor. The chance of a quick profit entices some to buy some very dubious cryptocurrencies. In addition to Bitcoin and Co., but also the classic options trading opportunities for extraordinary profits.
 Market correction fuels sales options

Increased volatility lets option traders get their money back. For example, prices for various put options on European indices have risen by more than 200 percent over the past few days. For example, those who acquired an option to sell on the Eurex derivatives exchange from the Swiss Market Index (SMI) at the end of January, with a reference price of 8,900 points and a very short residual maturity, were able to achieve a performance of well over 2,000 percent in the meantime. Of course, the development of such an option always depends on the underlying, the remaining term and the reference or conversion prices. Basically, a put option offers insurance against falling prices of the underlyings and has therefore been implemented in the capital market for decades. Especially in the past trading days such selling options experienced a revival. On the one hand, volatility skyrocketed, and on the other, the fierce price resets increased the premiums on the options. This double effect led to fulminant profits for option traders.

Options trading offers an alternative

In order to implement professional strategies and to make sustainable use of market opportunities, options trading offers significant advantages over crypto-trading. The recent price erosion on the crypto exchanges impressively demonstrated the massive uncertainty associated with the trading of digital coins. Investors who recognize opportunities and risks in more volatile market phases and reasonably assess their own risk profile are likely to be more successful in trading options over the long term than with cryptocurrencies. Of course, but also have digital currency their raison d'être and can bring the investor incredible profits. However, the hitherto modestly regulated cryptocurrency market, unlike the fixed rules of options trading, is a Wild West of modern capitalism.
Pierre Bonnet / Editors finanzen.net

 
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