STRATEGIES
Options (Options Trading)
Definition
Options are derivative contracts that give the holder the right (but not obligation) to buy or sell an asset at a specific price before expiration. They're used for hedging, speculation, and income generation.
Example
Example
Buying ETH call options for $2500 strike gives you the right to buy ETH at $2500 regardless of market price, while selling covered calls generates income.
Risks to Consider
Risks
- Time decay
- Volatility risk
- Premium loss
- Assignment risk