Features of CoinEx Options
1. Finite losses VS Infinite profits
Take a call option for instance, the profit of a call option depends on the price difference between the market price and the exercise price: If the exercise price is 10,000 USDT and the price of BTC rises to 30,000 USDT, the exercise PNL will be 20,000 USDT; if it rises to 100,000 USDT, the exercise PNL will be 90,000 USDT. The more it rises, the more you earn.
What if the price falls? The maximum loss of an option does not exceed the cost of purchasing the option. If a call option costs 1,000 USDT at that time, the maximum loss is 1,000 USDT. Even if the BTC price drops to 5,000 USDT, your total loss will remain 1,000 USDT.
This is also the highlight of Options: Finite losses VS Infinite profits
2. Leverage without forced liquidation
Forced liquidation happens as long as there is leverage, no matter it’s in Margin trading or Futures trading. The platform will liquidate user’s long contracts when the market price ever drops to the forced liquidation price. Even if the price eventually rises again, the positions would be gone and so are the money.
This is not the case in an option contract: As long as the coin price rises back to an ideal position before the option contract is exercised, even if the price fluctuates drastically within the pre-exercising timeframe, the buyers of the call options may still gain profits after exercising the contract.
3. Multiple profit approaches
There are 3 key factors that influence the option values: The directions of option index price, fluctuation rate and time value. Basically, the value of spot and futures tradings are up the rise/fall of trade mark price while in option trading, it is also determined by the fluctuation rate and time value. Therefore, users can make assessment and gain profits from these factors.
4. Versatile investment strategies
Most investments, such as spot and futures trading, are two-sided trades that involve a buyer and a seller while the option is a four-sided trade: Each call option has a bullish buyer and a bearish seller, while put options have a bearish buyer and a bullish seller. The feature allows investors to establish a multidimensional trading strategy.