Limited risk but unlimited profit
You lose no more than the premium you pay. Your profit is unlimited.
You pay much less to buy an option than directly buying a Bitcoin.
Instead of betting on the hard to predict market direction, you can trade volatility.
Risk Hedging (Insurance)
It can insure your Bitcoins because it gives you the right to sell them at the current price in the future.
When the contract expires, you know you profit/loss.
If you believe the price is going up, buy CALL;
otherwise buy PUT.
If you choose CALL, you expect the price will be higher than the strike price.
If you choose PUT, you expect the price will be lower than the strike price.
expiry time: 20150606 19:00
strike price: 225
You buy a contract:
Suppose the contract costs you 0.0003 BTC
(The price depends on the market)
You wait until June 6th, 19:00
And you find the BTC/USD price is 240, which is higher than your strike price 225.
You get payoff
0.01*(240 - 225) USD
(Our contract size is 0.01 BTC, so you saw 0.01 above)
So you make profit
0.01*(240-225)/240 BTC - 0.0003 BTC
= 0.000325 BTC
But if the price is lower than the strike price 225,
you get nothing back and thus lose 0.0003 BTC.
Profit graph of a CALL option
Profit graph of a PUT option
You make profit no matter the direction of the market
How to buy a vanilla option contract using the interface?
Choose binary option
Choose expiry time
Click the row (except the strike column) with the strike price you need.
Or select here
Choose strike price (continue)
There are so many strike prices. Which shall I choose?
the higher the strike price,
the harder the final price will be higher than that,
and the less chance you make profit,
and thus the cheaper the contract.
Choose order type
What is a market order?
A market order let you buy immediately at the current market price
the best market price you can buy at
What is a market order (continue)?
Click to see the market depth
To see the full orderbook
What is a limit order?
A limit order let you buy at your specified price.
You may need to wait until another user takes your price.
specify your own price here
choose limit order
What is a limit order?
When your limit order has not been filled, you can keep waiting or cancel it.
Click to cancel the order
Input the number of contracts you want to buy
Wait for the result
You can see your balance changes
Check your detailed trading history
Close your position before it expires
If you don't want to hold your position anymore, you can also close it.