BitOffer Institute: 1 Min to Learn the Difference among the Options Trading, the Spot Trading, and the Futures & Swap Trading

Since bitcoin has been launched for 10 years, trading patterns became more and more diverse, from the Spot Trading to the Futures & Swap Trading to the Options Trading, and even ETF in the near future. Besides the Spot Trading, Futures & Swap Trading and Options Trading are essentially derivatives of bitcoin which can be used as hedging methods for the Spot Trading. The launch of bitcoin financial derivatives is a performance of improvement and development of the market. No matter Futures & Swap Trading or Options Trading, they are both a way for investors to bet on the trend of bitcoin price without holding bitcoin, it is also one of the attractions to the investors who have less funds.

BitOffer Exchange, a new generation BTC financial derivatives trading platform, has launched BTC Options at the end of October. Moreover, BitOffer is also the “Neil Alden Armstrong” for bitcoin Options Trading. With the features of “No Fees”, “No Margins”, ”No Exercising” and “No Liquidation”, BitOffer Bitcoin Options offers users opportunities to earn 1,000X leverage profit whether bull or bear market. It seems that Options Trading has many more advantages than Futures & Swap Trading. However, what are the differences between the Spot Trading, the Futures & Swaps Trading and Options Trading? I will make a comparison as below:

For example,

As the price of bitcoin now is $8,000, when it rises from $8,000 to $8,500,

1. The Spot Trading: Earning $500 with buying 1 bitcoin;

2. The Options Trading: Earning $500 with buying a call contract.

3. The Futures & Swap Trading: How can you earn $500 with the Futures & Swap Trading?

For instance, you invest $500 in an exchange to buy long contracts for 20X leverage. Then, the price of bitcoin must rise by 5% so that you can double your investment, which means the price of bitcoin must rise from $8,000 to $8,400 (5%).

When those 3 trading patterns bring the same profit, you need to invest:

1. The Spot Trading: $8,000

2. The Futures & Swap Trading: $500

3. The Options Trading: $5.

It is obviously the investment of the Options Trading is the lowest, which can be considered that the Options Trading is the most profitable the riskiest. Take the Options Trading as the case for calculating, you only invest $5 to earn $500 as the return, it is equivalent to 100X leverage profit based on the budget. Therefore, Bitcoin Options launched by BitOffer is much more excellent than the Spot Trading and the Futures & Swap Trading.

In terms of risk, I truly believe that most users have the same experience that it is risky that the accounts are easily forced into liquidation. However, the largest possible loss for Options Trading is only the principal when you buy for your contracts, and it will never do any harm to your account.

Is the Options Trading the best hedging methods?

The essential function of the Options Trading is to hedge the risk of the Spot Trading, but most investors used it for speculation without realizing the Options Trading is the best hedging methods. Why?

For example, the price of bitcoin now is $8,000, if it drops to $7,000, you would lose $1,000 without any hedging when you hold 1 bitcoin.

But if you buy a put contract on BitOffer Bitcoin Options with $10 for hedging, then when the loss of $1,000 on the Spot Trading, you only pay $10 to ensure your asset remains the same value because you earn $1,000 on BitOffer Bitcoin Options with the put contract you buy for hedging.

What if the bitcoin price rises from $8,000 to $9,000?

You earn $1,000 on the Spot Trading but lose only $10 on the Options Trading. This is why hedging is attractive. With BitOffer Bitcoin Options, the best hedging methods, you will be the winners all the time.