How to play DigiFinex options contracts

By selecting a particular cryptocurrency, expiry date, strike price, and contract type, traders can speculate on future price fluctuations while managing risk and potentially generating income through DigiFinex options contracts.

Nov 24, 2024 at 06:05 pm

How to Play DigiFinex Options Contracts

Introduction

DigiFinex options contracts are a powerful tool that can be used to speculate on the future price of a cryptocurrency. They offer a number of advantages over traditional spot trading, including the ability to leverage your position, limit your risk, and generate income.

How to Get Started

1. Open an account with DigiFinex.

The first step is to open an account with DigiFinex. You can do this by visiting their website and clicking on the "Register" button. Once you have created an account, you will need to verify your email address and phone number.

2. Deposit funds into your account.

Once you have verified your account, you will need to deposit funds into it. You can do this by using a variety of methods, including bank transfer, credit card, and cryptocurrency.

3. Navigate to the Options Trading Page

Once you have deposited funds into your account, you can navigate to the Options Trading Page. You can do this by clicking on the "Trade" tab at the top of the page and then selecting "Options" from the drop-down menu.

How to Trade Options Contracts

1. Choose an underlying asset.

The first step is to choose an underlying asset. This is the cryptocurrency that you are speculating on the future price of. DigiFinex offers a variety of underlying assets, including Bitcoin, Ethereum, and Litecoin.

2. Select an expiry date.

The next step is to select an expiry date. This is the date on which the options contract will expire. DigiFinex offers a variety of expiry dates, ranging from one day to several months.

3. Choose a strike price.

The third step is to choose a strike price. This is the price at which you believe the underlying asset will be on the expiry date. DigiFinex offers a variety of strike prices, both above and below the current spot price.

4. Select a contract type.

The final step is to select a contract type. DigiFinex offers two types of options contracts: calls and puts. Calls give you the right to buy the underlying asset at the strike price on or before the expiry date. Puts give you the right to sell the underlying asset at the strike price on or before the expiry date.

Example

Let's say that you believe that the price of Bitcoin will rise in the next month. You could buy a call option with a strike price of $10,000 and an expiry date of one month from now. If the price of Bitcoin rises above $10,000 on or before the expiry date, you will make a profit. If the price of Bitcoin falls below $10,000, you will lose money.

Risks of Trading Options Contracts

There are a number of risks associated with trading options contracts. These risks include:

• The price of the underlying asset could move against you. If the price of the underlying asset moves against you, you could lose money.
• The options contract could expire worthless. If the price of the underlying asset does not reach the strike price on or before the expiry date, the options contract will expire worthless.
• You could be forced to margin call. If the price of the underlying asset moves against you by a significant amount, you could be forced to margin call. This means that you will need to deposit additional funds into your account to cover your losses.

Conclusion

Options contracts can be a powerful tool for speculating on the future price of a cryptocurrency. However, it is important to understand the risks involved before you start trading.