Options Trading with Delta Exchange: A Descriptive Guide

2021-12-16 04:05:18 · 353 views · 5 min read

Cryptocurrencies have been around for more than a decade, but it was only in the last couple of years that they gained the kind of popularity they have now. As cryptocurrencies become increasingly mainstream, a large chunk of the population is starting to incorporate them into their portfolios. While the crypto industry itself is still in its infancy, several crypto products and trading instruments have already taken center stage. Crypto options are the most prominent example of this.

 

Crypto options, for the uninitiated, are financial contracts that let investors buy or sell an underlying asset at a predetermined price at a future date. Options, like other derivative instruments, allow investors to place directional bets on an asset's price movement and can be settled either in cash or cryptocurrency.

 

Essentially, options are a type of derivative contract that allows its owner the right to purchase or sell the underlying asset but not the obligation to do so. A "call" option is one that will allow you to buy the underlying asset, whereas a "put" option allows you to sell it. Investors who believe the asset will rise in value can buy call options and benefit from them if their market price surpasses the strike price. On the other hand, if investors are pessimistic about the future value of an asset, they may buy put options, which will pay out if the asset's market price falls below the strike price.

 

Because they are a relatively low-cost and low-risk solution for trading digital assets, crypto options have grown to become one of the hottest items in the crypto markets these days. If you’re looking to get started with crypto options trading, Delta Exchange is your best choice. Not only is Delta one of the world’s top crypto derivatives exchanges, but it also offers a wide range of innovative derivative products that appeal to crypto traders.

Options Trading on Delta: the World’s Favorite Crypto Derivatives Exchange

Delta Exchange offers options across three categories: Vanilla options, MOVE options, and Turbo options. Let us explore them in detail.

 

  • Vanilla Options

Delta provides call and put options on BTC, ETH, BNB, LINK, XRP, LTC, BCH, SOL, and ADA under the category of vanilla options. All of the above are European options that can only be executed at expiration and are available in various strikes and expiry dates.

While a typical vanilla option offers the holder the right to purchase or sell the underlying asset at a defined price at some point in the future, the holder isn't required to complete the trade.

 

  • MOVE Options

A MOVE Contract is a new type of derivative contract in which the price is proportionate to the absolute value of movement in the price of the contract's underlying asset (BTC or ETHE) over time. MOVE Contracts are often related to the underlying asset's price volatility and allow traders to bet on the extent of price swings rather than the direction.

A trader can long the contract y if they believe the price of the underlying asset of the MOVE contract will move up/ down a lot. Conversely, a trader can short the MOVE contract if they believe that the price of the underlying asset will remain reasonably constant. And in this way, MOVE contracts allow traders to bet on volatility.

MOVE contracts are effectively a straddle - a combination of a PUT option and a CALL option with the same strike price on both options. Daily MOVE contracts, which monitor the movement of the underlying over a 24-hour period, and weekly MOVE contracts, which track the movement of the underlying over a seven-day period, are the two types of MOVE contracts available on Delta Exchange.

For MOVE contracts on Delta Exchange, both maker and taker fees are 0.05%. Trading fees are generally charged on the notional value of the position.

 

Start trading options on Delta today!

Here’s how you can get started with options trading on Delta Exchange.

1. Visit Delta Exchange’s trading dashboard on the website. Always check the trading fees before you begin trading on the exchange. Trading fees for all options contracts are capped at 10% of the premium of that option.

2. Go to the Options Trading option on the website and select the call or put options contract in which you want to invest your funds.

3. You can view the details about any options contract by going to the dashboard of the particular options contract. Information concerning the underlying symbol of the options contract, expiry date, Greeks- delta, Gamma, Vega and Theta (provide insights into various factors affecting options price sensitivity), bid price, bid quantity, offer price, offer quantity, market price, order book, etc., is present on the dashboard.

4. The second step is to choose the kind of order you want to make. For this, Indicate whether you want to buy long or sell short, also enter the order price and the quantity.

5. If you are selling short, you can choose the leverage as well. Finally, click on place order.

6. When you place an order, it will appear on the 'Open Orders' tab in the Balances panel right away. And when an order is executed, a new 'Open position 'will show up on the Balances tab.

 

You can also follow this easy video tutorial to start your options trading journey with Delta Exchange. Happy Trading!

 

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