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The cryptocurrency market provides opportunities to make money every day. Some of them are conservative, for example, trading on bitcoin rate fluctuations, the value of which can be about 10% per day. Other options offer both significantly higher income and significant risks.
High leverage trading and options
One of the surest ways to earn hundreds of percent on one trade, or to lose everything on it, is to trade with leverage. Many exchanges and derivative platforms such as Bitmex, Binance Futures, OKEx and others allow clients to borrow funds against the security of their assets. The size of the loan and the risks are determined by the coefficient, the value of which starts from 1 and reaches 100, in rare cases exceeding this value.
It works as follows. A trader temporarily gives the exchange, say, 1 ruble as collateral and, having chosen a leverage with a coefficient of 100, receives 100 rubles in return. Cryptocurrency is automatically bought on them. If its price rises by 1%, the user gets 100% profit. If the asset becomes 1% cheaper, the site closes the deal and takes both the issued funds and the collateral.
Private trader Alexander Boyarintsev spoke about another way of earning money. He offered an option with the purchase of call options for a cryptocurrency. These are contracts that give the right to buy an asset under predetermined conditions. The price of such contracts may fall if the volatility of the asset rate decreases, this will make the conclusion of the transaction more profitable.
“Example: Bitcoin price was $ 9,500. Volatility dropped and options with a strike of $ 11,000 and a two-week expiration date were worth $ 60. I bought 3 options. Then the BTC price went above $ 11,000. Accordingly, everything that was above this price turned into profit. The risk was $ 180 - $ 60 for each option. The total profit is $ 3000, ”Boyarintsev explained.