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How to Trade Crypto Options
The easiest way to trade crypto options is on a centralized digital asset trading platform. These platforms allow you to trade USD-denominated cryptocurrency options on major pairs like Bitcoin and Ethereum. These contracts give you the right to buy (call) or sell (put) an asset at a specific price in the future.
We recommend the Bybit trading platform because they do not require KYC/verification and offer deep liquidity for BTC options and will be releasing Ethereum (ETH) soon. You can get started with this simple guide:
- Create account: Sign up to Bybit and provide your email addres to verify.
- Deposit Funds: Deposit funds to the Bybit platform to trade Options. You can deposit via Bank Transfer, Credit Card/Debit Card, or a Crypto Deposit (e.g USDC).
- Find Markets: Find the Options contracts you want to trade on the Bybit platform.
- Execute Trade: Input the amount of USDC you want to Long or Short and input your leverage (25x), then execute your trade.
What is Options Trading?
Options trading is the process of buying or selling options, where options are financial contracts that give the buyer the right to buy or sell an underlying asset at a set price at a later date. Options trading can be used for hedging, speculation, or income generation through various yield strategies.
Options can be bought and sold on exchanges or over-the-counter (OTC). Options trading is a popular way to speculate on the price of financial assets, such as stocks, commodities, or currencies. Options provide traders with the flexibility to speculate on the direction of an asset's price without having to own the underlying asset.
Best Crypto Options Platforms
You can find out more information about the best crypto options platforms below.
Bybit - Best Options Trading
ByBit is the fastest growing trading platform in the world with billions of dollars in daily volume across their Spot, Futures and Options markets. They are one of the only derivatives exchanges that still offers features like 100x on BTC, ETH, SOL and other coins.
Bybit also offers a BTC options market with deep liquidity and low fees starting at 0.01% for makers and takers. You can read our ByBit Review for more information.
One of the key advantages of Bybit is its high liquidity, which results in low slippage and tight spreads. It also has a very responsive customer support team that is available 24/7. Overall, Bybit is the best crypto options trading platform for those who are looking for a comprehensive and user-friendly experience.
Pros
- Deepest liquidity and tightest spreads
- No KYC to trade crypto options
- Available for most countries in the world
- Lowest options trading fees
Cons
- Only offers BTC options
Deribit Options - Best for Institutional Investors
Deribit is a robust and reliable cryptocurrency derivatives platforms that offers the world's largest Bitcoin and Ethereum options markets. They trade over $1B in daily volume across BTC and ETH, however charge relatively high fees at 0.05%.
Deribit is a professional options trading platform that is designed for institutional investors. It offers a wide range of options with different strike prices and expiration dates. Deribit also has very high liquidity, which results in tight spreads and low slippage.
One of the key advantages of Deribit is its advanced trading features, such as multi-leg strategies and implied volatility charts. It also has a responsive customer support team that is available 24/7. Overall, Deribit is the best options trading platform for institutional investors.
The Deribit company headquarters is based in Panama City and is not available for US investors.
Pros
- BTC, ETH and Solana options
- Deep liquidity across all pairs
- Options OTC desk for institutions
Cons
- Not available for US options traders
- 5x higher fees than Bybit
Delta Exchange - Best for Altcoin Options
Delta Exchange is a lesser-known trading platform that offers Options trading on the widest variety of markets. Their Crypto options exchange currently offers coins like BTC, ETH, BNB, AVAX, SOL, LINK, MATIC and XRP (Ripple).
One of the main disadvantages of Delta is their liquidity. Many of their options contracts trade less than $1 million in daily volume, which can make it hard to move trades with size.
Pros
- Widest variety of options contracts
- No KYC or verification
- Low fees at 0.2%
Cons
- Liquidity is low on most pairs
- Relatively new exchange (risks)
IQ Options
IQ Option is a popular online broker that offers a wide range of financial instruments, including crypto options. One of the key advantages of IQ Option is its low minimum deposit requirements, which make it accessible to a wide range of traders.
One of the best things about IQ Option is that they offer a free demo account. This is a great way to practice trading before risking any real money.
Pros
- Offers Stocks, Forex and Crypto
- No KYC or verification
- Low fees at 0.1%
Cons
- Only offers 10 Cryptos
- Relatively new exchange (risks)
HXRO Trade
HXRO Options provides traders with a unique way to trade the cryptocurrency market. It is traded on a decentralized exchange and is settled in ether, the native currency of the Ethereum blockchain.
This makes HXRO Options an ideal tool for hedging and speculation, as it allows traders to take advantage of price movements without having to actually purchase or hold the underlying
Pros
- Trades setlle on-chain
- No KYC or verification
- Parimutuel Options
Cons
- Not a lot of liquidity
- Only offers 10 indices
Best Decentralized Options Platform
If you are looking to trade cryptocurrency options on-chain, we recommend the Dopex protocol on Ethereum, Avalanche and Arbitrum. Their platform allows users to trade options on Ethereum (ETH), and to participate in options yields farming strategies through their vaults.
These crypto option vaults on Dopex allow investors to collect premium from Call or Put purchases, and earn rewards at the same time.
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Crypto Options Trading Strategies
There are two types of options in Crypto and traditional finance: call options and put options. Call options give the holder the right to buy an underlying asset at a set price, while put options give the holder the right to sell an underlying asset at a set price. Options can be traded for various lengths of time, from seconds to years.
There are a variety of Crypto options trading strategies that can be used to speculate on the price movement of an underlying asset. Some common options trading strategies include:
- Buying call options to bet on an asset's price increase.
- Buying put options to bet on an asset's price decrease.
- Writing covered call options to generate income from an asset that is expected to remain relatively stable in price.
- Writing uncovered call options to speculate on an asset's price decrease.
- Writing covered put options to generate income from an asset that is expected to remain relatively stable in price.
- Writing uncovered put options to bet on an asset's price increase.
- Combining options in a strategy known as a spread to limit risk or take advantage of different price characteristics.
Final Thoughts
As the popularity of digital assets increases among institutional investors, so will the volume of the Crypto options markets. Options are without doubt the most popular volatility hedge in traditional markets, and that trend is starting to cross the chasm into the crypto-sphere.
There have even been rumors of Goldman Sachs stepping in to provide a platform for Crypto options as they see it as a high-growth market.
With that said, if you are looking to get started with Crypto options - we recommend you look no further than Bybit for simplicity of user experience, low fees and deep liquidity.
