BitOffer Institute: The method for making money under Bitcoin futures explode

[Hugo Barbosa]

Source from BitOffer

In June 2019, the Exchange Bitsane closed down and refused to withdraw money, which involving more than 246,000 people.

In July 2019, Btron exchange closed down. Due to the rights defending from a large number of people, Btron returned most of its assets and was praised as "the integrity exchange, lifts the mud without staining it".

When the Fubit exchange collapsed on May 28th, investors found the company's address and arrived there with only an empty office left.

There are more cases similar to what was mention. Although many exchanges did not abscond with the money, many people might hear of the uneven quality of exchanges, such as there are frequent cases of behind-the-scenes manipulation as well. Many of the exchanges' users have suffered huge losses from the influence of those behind them, in addition to concern about the risk of market conditions, their operation strategy, but also worry about the “murder” from the platform.

Still, many users are taking high risks in pursuit of high returns from high leverage. In terms of risk control, most people will set up self-damage, but this method only cures the symptoms and cannot recover the losses caused by the explosion. Nowadays, the digital currency derivatives market has been very well developed, and we can hedge the risks with various combinations of trades. What I want to share with you today is to use correctly with the option and futures to gain without lose under the market explosion.

About Bitcoin Option
What we take in this article is with the lower cost to buy a bitcoin option on the BitOffer exchange. To choose from the expecting direction up or down (call option and put option), you can earn as much as the bitcoin goes up or down in the futures. It has the same equity as the stock, but it costs less principal.

For example, now the Bitcoin price is $10,000:
1. Open long 20X Bitcoin at $800;
2. Meanwhile, buy 2 put options contracts on BitOffer

It is worth noting that the option and the futures should be reversed operation, the open-short plus call option, the open-long plus put option, to play a hedge, to ensure that the steady income.

After then, there will be 2 situations:

The first situation: When the Bitcoin price increases by $200 (+2%)
1．Open long 20X Bitcoin: Earning 40% in profits, $320.
2．Lose the premium that you use to buy put options contract: -$60.
3．The net profit will be $320-$60= $260

The second situation: When the Bitcoin price decreased by $200 (-2%)
1. Open long 20X Bitcoin: Losing 40%, $320.
2. The Put Options contracts You buy earn $400.
3. The net profit will be $400-$320–$60=$20.

Through the above hedging operations, we found that no matter whether bitcoin goes up or down eventually, we can achieve a stable profit. It is worth noting that the above options specifically refer to the BTC options (American version) issued globally by BitOffer Exchange, which is characterized by zero margins, zero handling fee, and no explosion mechanism. If you choose traditional European options such as OKEX and JEX, then you cannot hedge and there is liquidity risk.

In addition to hedging the risk, this method can also for hedge stock. The biggest difference between option and stock is that the cost of buying a BTC with the spot is $10,000, while an option only needs $5. If the bitcoin rises to $15,000, the spot profit is $5,000 and the cost is $10,000. Meanwhile, a bitcoin option earns $5,000 with only $5 costs, which is 1,000 times from the cost. This is the unique charm of options, the limited risk with unlimited benefits.