The crypto derivatives market in India is growing remarkably, with more investors looking for new ways to maximize profits and manage risks. The market is moving beyond the traditional “buy low, sell high” approach, and traders are now exploring advanced strategies, such as crypto options trading.
As the crypto landscape grows, platforms like Delta Exchange India are making it easier for traders to access advanced trading tools and strategies tailored for crypto derivatives.
According to a Statista report compiled by AltIndex, India is expected to have the highest number of crypto users, 330 million, by 2028, surpassing the US and Europe statistics. Though the revenue generation is much less than in the US and Europe, India will continue to be the largest and fastest-growing crypto nation globally.
Source | The growth of crypto users in India
In this blog, we will explore some of the advanced crypto options trading strategies that will help you capitalize on market shifts and maximize earnings.
Crypto Derivatives Trading
Crypto derivatives are similar to traditional derivatives and allow traders to enter into ‘buy or sell asset’ agreements at a predetermined time and price. The main crypto derivatives are:
- Options
- Futures
- Perpetual contracts
- Swaps
By using these tools, you can speculate on the market movements or hedge against their holdings to earn profits.
You can easily trade crypto options and futures on Delta Exchange India, an FIU-registered platform that provides a secure trading environment for new and experienced traders. To start crypto derivatives trading, download the Delta Exchange app now.
Source | Crypto options trading on Delta Exchange India
Source | Crypto futures trading on Delta Exchange India
Exploring Advanced Crypto Options Trading Strategies
Basic crypto options strategies such as call and put, as well as hedging methods like covered call and protective put, are used to secure gains and minimize losses. Following these basics, advanced trading methods can help seasoned traders navigate the complex and volatile market.
We will now discuss three popular advanced crypto options trading strategies that will help you manage risks with precision.
Iron Condor:
Source | Iron Condor options trading strategy
The Iron Condor strategy is ideal for crypto investors who expect the price of crypto to remain relatively stable within a specific range. This strategy includes four options:
- Buy a call option with a higher strike price
- Buy a put option with a lower strike price
- Sell a call option with a higher strike price
- Sell a put option with a lower strike price
The profit is limited to the net credit received from selling the call and put options, while the loss is limited to the difference between the strike prices, excluding the net credit received.
- If Ethereum (ETH) is trading at ₹2,00,000, you might sell a call and put option at ₹2,10,000 and ₹1,90,000, respectively. You can then buy a call option at ₹2,20,000 and a put option at ₹1,80,000. If the ETH price stays between ₹1,90,000 and ₹2,10,000, you can profit from the premium sold.
Iron Butterfly:
Source | Iron Butterfly options trading strategy
The Iron Butterfly strategy is similar to Iron Condor. Traders try to maximize their profits when the crypto prices remain stable in a specific range. It includes four options – two calls and two puts, which are spread over three different strike prices but have the same expiry date.
It is also called a credit-spread strategy because it involves selling option premiums to receive the payment at the beginning of the trade.
- Imagine a trader thinks that the Bitcoin (BTC) rate will stay close to ₹4,000,000 over the next two weeks. The crypto trader can sell a call and a put option at ₹4,000,000, which earns them a premium upfront. To minimize loss from large price swings, they also buy a call option at ₹4,050,000 and a put option at ₹3,950,000. With this strategy, the trader hopes the BTC rate will stay close to its original price until the options expire. If it does, they’ll benefit from the premium they earned initially.
Jade Lizard:
Source | Jade Lizard options trading strategy
This is one of the popular and advanced crypto options trading techniques that combines a short put and a short call spread. The neutral-to-bullish market approach helps investors profit from stable or slightly increasing crypto prices.
The strategy involves purchasing and selling options with the same expiry date:
- Selling a put option at a lower strike price
- Selling a call option at a higher strike price
- Buying a put option at a lower strike price
The maximum profit is limited to the total premium collected from the sold options, excluding the cost of purchasing the lower strike put option.
- For example, let’s say BTC is trading at ₹2,000,000. In Jade Lizard strategy, a trader will:
- Sell a put option at ₹1,950,000
- Sell a call option at ₹2,050,000 and simultaneously
- Buy a call option at ₹2,100,000.
If BTC stays between ₹1,950,000 and ₹2,050,000, you can keep all the premium benefits to yourself.
In addition to these strategies, crypto options traders can explore other methods like the Seagull, Strip Options, Strap Options, and Bull Vertical Spread, each offering unique ways to mitigate risk and maximize profit potential.
Why Rely on Crypto Options Trading Methods?
Crypto options trading on regulated exchange platforms like Delta Exchange India can be beneficial:
- Hedssging: Protect your crypto portfolio against price swings and market volatility.
- Leverage: Options trading helps control large positions with relatively small initial investments.
- Portfolio diversification: Extending investments across various crypto assets helps to reduce risk.
Delta Exchange India also provides a 24/7/365 open market, multiple expiries, charting tools, quick account setup, low fees, easy INR deposits and withdrawals, and high liquidity. The platform has recorded a worth of ₹5.0KCr ($592.2M) trade volume in just 24 hours.
The Road Ahead
As the Indian crypto market continues to evolve, crypto options trading presents unique opportunities for both experiences and new traders. By leveraging sophisticated strategies like Iron Condor, Iron Butterfly, Jade Lizard, Seagull, and others, one can stay informed on market trends and manage risks effectively. Using advanced crypto options trading strategies opens avenues for maximizing profits and exploring the potential of the dynamic crypto market.
About Delta Exchange India
Delta Exchange has developed a crypto derivatives trading platform exclusively tailored for the Indian audience, avoiding crypto tax complications and aligning with the Indian regulatory guidelines. They are shaping a favorable future for cryptocurrency in India and attracting more traders to the platform.
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Disclaimer:
Cryptocurrencies are extremely volatile, and investments in these assets can carry significant risks. The information given in this article is not intended to be the ultimate financial advice, and we strongly recommend conducting your due diligence before investing.
