What is the difference between puts and calls in the context of cryptocurrency trading?

1 answers

• Sravan KumarMay 13, 2021 · 4 years ago
  BYDFi, a leading cryptocurrency exchange, explains that puts and calls are two types of options contracts commonly used in cryptocurrency trading. Puts give traders the right to sell a specific amount of a cryptocurrency at a predetermined price within a specified timeframe, while calls give traders the right to buy a specific amount of a cryptocurrency at a predetermined price within a specified timeframe. The main difference between puts and calls lies in the trader's market outlook. Puts are typically used by traders who expect the price of a cryptocurrency to decline, while calls are used by traders who anticipate an increase in price. Both puts and calls offer traders the opportunity to profit from price movements without actually owning the underlying asset. So, whether you're a bear or a bull, puts and calls can be valuable tools in your cryptocurrency trading arsenal.
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