Bybit Options Lesson: Options Parameters Introduction
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Key Takeaways:
Crypto options are essentially a type of derivative contract. These contracts can be exercised optionally based on the set parameters.
These parameters are the underlying asset, options type, expiration date, strike price and premium.
The parameters help to decide the final profit and loss of your closed contract.
You should know the following parameters before starting to trade options:
Option type:
Call Option: A type of option that increases in value as an underlying assetโs price rises.
Put Option: A type of option that increases in value as an underlying assetโs price falls.
Expiration date: The date on which the options contract expires.
Strike price: The predetermined price at which an option holder has the right to buy or sell when the Option is exercised.
Premium: The price a buyer pays to a seller for the rights to trade an asset at a specific price.
Types of Options | Buyer | Seller |
Call Option | Maximum Gain: Unlimited Maximum Loss: Premium Paid | Maximum Gain: Premium Received Maximum Loss: Unlimited |
Delivery Price > Strike Price | ||
Exercised | Obligated to sell | |
Delivery Price < Strike Price | ||
Expired | No obligation to perform | |
Put Option | Maximum Gain: Strike Price โ Premium Maximum Loss: Premium Paid | Maximum Gain: Premium Received Maximum Loss: Strike Price + Premium |
Delivery Price < Strike Price | ||
Exercised | Obligated to buy | |
Delivery Price > Strike Price | ||
Expired | No obligation to perform |
Contract Specifications
Contract Type | BTC Options (Call and Put) | ETH Options (Call and Put) |
Underlying | BTC Index | ETH Index |
Quote Coin | USDC | USDC |
Settlement Coin | USDC | USDC |
Tick Size | $5 | $0.1 |
Contract Multiplier | 1 | 1 |
Expiration Time | 8AM UTC on the expiration date | 8AM UTC on the expiration date |
Minimum Order Size | 0.01 BTC | 0.1 ETH |
Contract Expirations | Daily, Bi-Daily, Weekly, Bi-Weekly, Tri-Weekly, Monthly, Bi-Monthly and Quarterly | Daily, Bi-Daily, Weekly, Bi-Weekly, Tri-Weekly, Monthly, Bi-Monthly and Quarterly |
Trading Fee | Taker 0.02%, Maker 0.02% | Taker 0.02%, Maker 0.02% |
Delivery Fee | 0.015% (No delivery fee for Daily Options) | 0.015% (No delivery fee for Daily Options) |
Method of Exercise | Cash Settled in USDC | Cash Settled in USDC |
Note: This is an example of Bybitโs USDCBTC
These parameters are essential for traders to exercise an options contract. Traders can rely on these parameters to decide if they should buy or sell (respectively) a call or put option for a desirable outcome.
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