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

  • How To Start: Options Basics

    Today might just have the smallest gap between Wall Street and Main Street we’ve ever experience.  We’ve come a long way when it comes to common retail traders access, affordability of trade commissions, options trading education, research and analysis services, and, finally, some progress in accessibility of technology for options traders.

    By Drew Hilleshiem,

    • 0 comments
    • 137 views
  • Investors Are Not As Smart As The Media Thinks

    Over the last decade there has been a substantial rise in proclamations such as “investment advisors are useless,” “manage your own assets,” “don’t pay for financial advice,” and other similar sentiments. 

    By cwelsh,

    • 0 comments
    • 124 views
  • Should You Close Short Options On Expiration Friday?

    Options traders spend a lot of time trying to figure out the perfect moment to open a trade; but little attention is devoted to the other side of the transaction. When should you close? This applies equally to long and short positions. However, one aspect of short timing concerns expiration Friday.

    By Michael C. Thomsett,

    • 0 comments
    • 344 views
  • 8 Strategies For High Volatility Markets

    Trading in high-vol environments requires a different approach from low-vol markets. Here are 8 strategies to improve your trading and help you to survive in high volatility markets. They are very different from strategies in low volatility environment.

    By TFCAB,

    • 0 comments
    • 177 views
  • Selling Options Premium: Myths Vs. Reality

    Selling Options Premium refers to certain set of strategies that involve net selling of options, as opposed to buying premium where you are net buyer of options. There are a lot of myths and misconceptions about Selling Options Premium. This article will explain the basic concepts and debunk some of the myths.

    By Kim,

    • 0 comments
    • 696 views
  • Combining Momentum and Put Selling (Updated)

    In February of 2017, I wrote an article about combining together the concepts of momentum and put selling. You can find that article here as prerequisite reading. With this post, we'll look at how the strategy presented has done since then, along with some additional implementation ideas.

    By Jesse,

    • 2 comments
    • 516 views
  • Options and Invisible Risks

    Entry and exit timing is crucial to successful options trading, without doubt. However, one form of risk not often acknowledged is the risk of taking too many actions, too soon, and for the wrong reasons.

    By Michael C. Thomsett,

    • 0 comments
    • 513 views
  • The Volatility Option Trade In Alibaba

    This is why you have a Trade Machine membership. We can ride the evergreen patterns, and we have, for years. But when the market shifts, we need a minimum amount of data to adjust, and succeed -- now we will. This is our time.

    By Ophir Gottlieb,

    • 0 comments
    • 768 views
  • James Cordier: Another Options Selling Firm Goes Bust

    On November 1, 2018, a money manager named James Cordier from OptionSellers.com published an article on Seeking Alpha named Option Selling Opportunities So Good They're Scary. To me, this title alone would be enough to completely discredit the author and not trust him with my hard earned money.

    By Kim,

    • 10 comments
    • 5,008 views
  • Do You Have a Written Investment Plan?

    Meb Faber recently polled his twitter followers, and found that only about 25% have a written investment plan. Your investment plan should be based on your willingness (risk tolerance) and need (required rate of return to meet your long term goals) to take risk. 

    By Jesse,

    • 0 comments
    • 550 views

  Report Article

We want to hear from you!


I think your emphasis on blockchain possibly being the most useful tech to emerge from Bitcoin is right on target.  well done

Share this comment


Link to comment
Share on other sites


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 emoji 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