I'm a conservative trader, this means that before i enter into a trade i must have an entry and exit strategy, I have also used stop losses on almost all of my trades. Options trading is risky for me because of the nature of the trade, as i like to choose long term trades based on future events occurrence which forms part of my trading signals. For a Day trader, I think options trading is an option but to me who is conservative and my trades are either short term or long terms - options trading is more rigid.
Hi James! Would like to clear some misconceptions here.
Options trading is risky Flash crashes are very common in this volatile crypto market. This means that overly leveraged traders and investors will have to constantly face the problem of margin call, premature liquidation and large unforeseen losses. In September 2019, a Bitcoin flash crash of over $1,500 caused $651m liquidation on Bitmex.
Great risk/reward with options By buying a Put option instead of shorting, you do not have to worry about being forced out of position prematurely. Risk is limited to just the Premium Payable while you still enjoy leveraged returns on your position.
Options trading is rigidActually options are considered one of the most versatile trading tool in the market, enabling you to profit in any market condition, whether you think the market is going up, down or sideways.
On Sparrow, we also provide customizable options - you can pick your expiry date (options settlement is every Friday at 4pm (GMT+8) - whether short term (1 week ) or longer term (few weeks).