SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Bitcoin Helps the Financial Market Evolve


In our Bitcoin: The Greater Fool Theory article, we discussed how the most popular cryptocurrency in the world can be compared to a worrying trend. The ‘greater fool theory’ states that the price of an asset is determined not by its intrinsic value but by the sentiments and expectations of market participants.

This is exactly what's happening to Bitcoin's prices. Investors are expecting that Bitcoin's prices will shoot up, and the only reason why the cryptocurrency costs thousands of dollars today is because people think it's valuable. 

However, despite the many controversies and naysayers that are against Bitcoin, one thing that's undeniably happening is that investors are getting more options for exposure to it. The cryptocurrency is helping the market evolve by changing the way people can speculate and hold cryptocurrencies. 

Options

For one, it’s now possible to trade Bitcoin options. Although, trading Bitcoin options are not for the faint-hearted as they are expensive and as volatile as Bitcoin.

Bitcoin options are just like any other options where investors pay a mark up for the right to buy or sell a fixed amount of Bitcoins on an agreed timeline. Currently, they are pricey because of "implied volatility". As the sentiment towards implied volatility goes up, so will the prices of the options. 

Investopedia provided a good example of Bitcoin options with high implied volatility. Based on the graph, a June 30 expiry shows a high implied volatility that varies from 90% to 200%. 

screen_shot_20170607_at_11.23.28_am.png

The demand for options has allowed Bitcoin to help the financial markets evolve, especially when the Chicago Mercantile Exchange (CME) announced its plan to launch Bitcoin futures in the last quarter of 2017. The increase in client interest in the evolving cryptocurrency industry led CME to introduce Bitcoin futures contracts. 

The number of investment vehicles that tap into the potential of Bitcoin is predicted to expand as the popularity of the cryptocurrency industry rises. Although being new to the investment world, Bitcoin options trading is now available in multiple countries.

Bitcoin ATMs

Bitcoin ATMs can now be accessed throughout the world. Bitcoin ATMs are being introduced in low-income areas, as well as places where banks are limited. Coinwire states that in the state of Detroit, there are about 30 ATMs, with more being strategically placed on the outskirts of Metro Detroit. Highland Park, Hamtramck, Pontiac, and Taylor are some of the low-income areas in Michigan where Bitcoin ATMs are being installed. 

There are no clear connections whether or not Bitcoin ATMs affected the cryptocurrency's spot prices, although it gave operators the opportunity to use a different financial model. CBS News specified that Bitcoin ATMs charge a percentage fee, as opposed to a flat fee in regular ATMs. Currently, Bitcoin ATMs collect a fee of about 9%, and if these machines become popular and widely accepted, its effect on the future of the cryptocurrency market is predicted to be massive. As more people feel comfortable with the conveniences that the machines offer, the more popular Bitcoin will become in terms of everyday use and merchant adoption.

Blockchain Technology

Despite Bitcoin's naysayers, blockchain – the framework that powers Bitcoin transactions – is one of the driving factors fueling the cryptocurrency industry's success. Some major organizations including IBM, Walmart, and Starbucks, all of which have no Bitcoin holdings, believe in blockchain's potential to improve payment systems and operations for merchants. With backing from globally recognized brands, the blockchain framework will continuously play a key part in Bitcoin's future success. 

In fact, the mere mention of the word blockchain opens doors to both fledgling and existing companies. Riot Blockchain Inc. saw a 20% increase in stock prices when it changed its name and dedicated its operations to blockchain research. Initial Coin Offerings (ICOs) that also dedicate their operations to blockchain's improvement are finding it easy to get funding from companies that believe in blockchain's potential to change the landscape of online financial payment systems. 
 

What Is SteadyOptions?

Full Trading Plan

Complete Portfolio Approach

Diversified Options Strategies

Exclusive Community Forum

Steady And Consistent Gains

High Quality Education

Risk Management, Portfolio Size

Performance based on real fills

Try It Free

Non-directional Options Strategies

10-15 trade Ideas Per Month

Targets 5-7% Monthly Net Return

Visit our Education Center

Recent Articles

Articles

  • Covered Calls –Does Rolling Forward Mean Higher Risk?

    Do you roll forward to avoid exercise? It seems like an obviously advantageous move. You avoid exercise and generate a net credit. What can go wrong? Actually, rolling incurs more risk, and every covered call writer needs to study the potential roll and compare the advantages of rolling versus closing and taking a loss or allowing exercise.

    By Michael C. Thomsett,

    • 0 comments
    • 311 views
  • Portfolio Protection Utilizing Calendar Spreads

    Calendar Spreads (including diagonals and ratios) can be a very effective method to “hedge” a portfolio. However, it is not without some complexities.Understanding the Theory and Methodology is important to achieve one’s intended result. In essence, one must understand the whys as well as the hows or they will continuously be faced trying to resolve dilemmas along the way.

    By Reel Ken,

    • 1 comment
    • 597 views
  • The Magic of Compounding, and the Tyranny of Taxes

    Today I want to talk about something that is often ignored, yet has a very large impact on the net performance of our trading and investing: Taxes. To illustrate the importance, I often like to point out both the power of compounding and the impact of taxes with a simple example.  

    By Jesse,

    • 0 comments
    • 170 views
  • How To Select The Best Options Broker

    Selecting the right broker is one of the most important things for options traders. It becomes even more important if you are an active trader and trade hundreds or thousands contracts every month. Select the wrong broker - and your chances to make money are going down dramatically.

    By Kim,

    • 4 comments
    • 619 views
  • Are Binary Options Smart Trades?

    Some ideas are simple at first glance but contain risks that might  not be entirely obvious. Binary options are an example. Some traders love them, just as some roulette players are attracted to the appeal of “red or black” as a 50/50 proposition(or close to it, a 47.4% chance of winning due to the ‘0’ and ‘00’ possibilities).

    By Michael C. Thomsett,

    • 0 comments
    • 407 views
  • Options Trading Matrix

    One of the greatest benefits to trading options is that you can make money in an up, down, or sideways market. For example: In a bull market you can buy calls, or purchase bull call spreads and bull risk reversals. In a bear market you can profit buying puts, bear put spreads and selling bear call spreads.

    By Jacob Mintz,

    • 0 comments
    • 519 views
  • Trading Earnings: The Myths and The Reality

    Nothing impacts stocks prices more than company earnings reports. There are many way to trade those earnings announcements. You can take a directional bet if you believe the stock will move (higher or lower). Or you can play it with some of the non directional strategies.

    By Kim,

    • 0 comments
    • 616 views
  • Delta Hedging Your Options Strategies

    All traders begin with an introduction to call and put options.  However, it's rare (apart from short puts) that an experienced trader would use these contracts by themselves. Instead, we primarily trade options spreads. There are many benefits to spreads. The variety of spreads are targeted to various market criteria and market environments.

    By Drew Hilleshiem,

    • 2 comments
    • 730 views
  • Allocating on Blind Faith

    Almost all passive investment strategies are based on the assumption that younger investors should hold more equities as a percentage of their total portfolio. Likewise, as they age and get closer to retirement, the allocation to fixed income assets should grow while equity holdings shrink.

    By Michael Lebowitz,

    • 0 comments
    • 594 views
  • Are Weekly Options a Form of Gambling?

    Options traders do not have to act as gamblers … even though many do. There may be a thin line between trading and gambling, and that line is obscured when it comes to weekly options. If you utilize options to reduce risk, it is smart trading. But if you treat options trading like a bet on red or black in a roulette game, then you’re not hedging; you’re gambling.

    By Michael C. Thomsett,

    • 0 comments
    • 882 views

  Report Article

We want to hear from you!




Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoticons maximum are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

Options Trading Blogs