Hey everyone,
I'm actually a photographer who's been in the business for 7 years. But lately, I've dived into the trading world. Started with crypto 5 years ago, then forex for the last 2 years, and now I've been doing options trading for about a year. I usually go for medium-term trades, holding perpetual contracts for 2 to 10 days.
Recently, I've been focusing on options trading and trying to learn as much as I can. In 2022, I took a Price Action course from @EfloudTheSurfer. Then in 2023, I completed an options trading course from @TCTA_Wolfe, another guru. Since then, options have become my main interest.
To be honest, I don't think I'm a good trader. It feels like hard work, so to speak do grunt work. The stress gets to me, and it's super frustrating when a profitable trade hits stop-loss only to reach the target right after. Even when my analysis is spot-on, I often mess up the execution or don't get the profits I was hoping for.
At some point, I got fed up with all this. I started thinking that big market makers probably don't trade this way. That's when I saw options. After realizing that the big players and modern trading rely heavily on options, I decided to give it a shot.
Let me break down options for you real quick. Imagine you're selling something, and you're offering someone the right to buy it at a set price in the future.
Here's an example: Let's say I am selling camera and I've got 100 extra cameras, each worth $100. In a month, they'll probably be worth $110 due to inflation and stuff. But I want to sell now because I'm not sure about the market. People might not buy theese stuff if there's an economic downturn, or they might suddenly want cheap hobbies and drive the price up. I don't want to take that risk. So, I make a deal. I sell someone the right to buy a camera for $105 on September 15th, and they pay me $2 for this right. That $2 is called a premium.
The buyer wants the camera anyway, so they're happy to have the option to buy it at $105 instead of $110. I've secured a potential sale and got an extra $2.
On September 15th, if the camera's worth $110, they'll buy it from me. If it drops to $90, they'll forget about our deal, and I keep the $2. Now imagine doing this with all 100 cameras - that's where it gets interesting.
This options thing isn't new. Dutch farmers came up with it way back in the 17th century for tulip bulbs. Now it's used all over, European Union using this all the time. You can use this method to trade anything from live cows to iron.
There are four main ways to trade options: buying calls, buying puts, selling puts, and selling calls. Two of these pay premium and have unlimited profit potential with limited risk, while the other two get premium and have limited profit but unlimited risk. Sounds crazy, right? But get this - the big players often prefer the risky-sounding ones. Of course, the longer the contract date, the higher its price.
Here's why I like options trading: If you're buying options, you can't get liquidated, you don't have to worry about stop-losses, your profit potential is unlimited, and you can't lose more than what you paid. For example, if I think Ethereum will hit $4000 by year-end, I can buy a call option for that. Even if Ethereum crashes to $1500 tomorrow nothing happend to me. If this things don't happend I only lose what I paid for the option. But if it goes above $4000, I'm in the money. Now ETH $2700 and 27 Dec contract price $200. We will see what happend? I will make remember to you this sentence
Let me give you a real example. A few weeks ago, when $ETH was at $3200, I bought an August 9th $2700 Put contract for $5 (0.0015 ETH). If I hadn't sold when it made a 12x return, I would've made $400 on August 9th when ETH was at $2300. That's an 80x return. When ETH dropped to $2100 on August 5th, the contract price hit 0.3 ETH, a 200x return. I was figuratively crazy at that time.
In the options market, you can control positions worth millions with just $1000. Right now, BTC is at $60k and ETH at $2700. To buy 1 $BTC or $ETH outright, you need that much cash. With perpetual trades, you're dealing with funding fees every 8 hours, liquidation risk, stop-losses, stress, and the hassle of carrying positions. Options don't have these issues. You just pay commission when buying or selling, the price can even drop to 0 without affecting you, and if it's at your target price on the expiry date, you profit. Of course always DYOR
Sure, options have their own challenges and quirks, but I think we'll learn them over time.
Anyway, that's it for now. Good luck with your trades!
#options #OptionTrading #OptionTrade #JourneyIntoCrypto #TradeOpportunity
