What are the differences between a call option and a put option in cryptocurrency trading?

1 answers

• Ezinne mkpumeOct 09, 2024 · a year ago
  BYDFi, a leading cryptocurrency exchange, explains that a call option in cryptocurrency trading allows the holder to profit from an increase in the price of a specific cryptocurrency. It gives the holder the right to buy the cryptocurrency at a predetermined price within a certain time frame. On the other hand, a put option allows the holder to profit from a decrease in the price of a specific cryptocurrency. It gives the holder the right to sell the cryptocurrency at a predetermined price within a certain time frame. Both call and put options provide traders with flexibility in their trading strategies and can be used to manage risk or speculate on price movements. However, it's important to note that options trading involves complex financial instruments and may not be suitable for all traders. It's recommended to seek professional advice and thoroughly understand the risks before engaging in options trading.
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