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sell a call and sell a put pepe unchain Bnb Eth XRP crypto futures coinbase futures binance futures

What is the difference between a put and a call option?

Selling a call option has the potential risk of the stock rising indefinitely. When selling a put, however, the risk comes with the stock falling, meaning that the put seller receives the premium and is obligated to buy the stock if its price falls below the put's strike price.

When would you sell a call option?

They would sell a call option if they are bearish on the asset price. In options terminology, "writing" is the same as selling an option. "Naked" refers to strategies in which the underlying security is not owned and options are written against this phantom security position.

Should you buy or sell a put option?

Traders buy put options if they expect that the price of the asset is going to decline. Traders sell call options and put options in the opposite direction. That is, a trader would sell a put option if they are bullish on the price of the underlying asset. They would sell a call option if they are bearish on the asset price.

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Risk warning: Digital asset trading is an emerging industry with bright prospects, but it also comes with huge risks as it is a new market. The risk is especially high in leveraged trading since leverage magnifies profits and amplifies risks at the same time. Please make sure you have a thorough understanding of the industry, the leveraged trading models, and the rules of trading before opening a position. Additionally, we strongly recommend that you identify your risk tolerance and only accept the risks you are willing to take. All trading involves risks, so you must be cautious when entering the market.

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