If you are an investor or a trader, meaning you buy and sell cryptocurrencies, then you’re familiar with spot trading. If you’re a bit more advanced, then you might even be familiar with futures trading. The thing is, both methods are inherently risky because volatility is the name of the game in the cryptocurrency space.
For example, if you bought 1 Bitcoin at the peak in 2021, chances are, you are sitting roughly 70% below your initial capital investment. And if you traded long using futures, your capital has probably been wiped out. So given the ridiculous price swings, crypto options are popular among investors and speculators who want to preserve their capital.
What are Crypto Options?
Crypto options are financial instruments that give you the rights (not obligation) to buy or sell the underlying cryptocurrency at a preset price (strike price) on or before the expiration date after a premium (betting price) is purchased. Traders use them for speculating, and investors for hedging.
How do Crypto Options work?
There are two types of options contracts: Calls and Puts. When you buy a call option (pay a premium), you are betting that the value of the underlying asset will increase, so you buy an underlying asset at a preset price (strike price), regardless of the market price before/at the contract’s expiration. If the price goes in your direction, you essentially buy the asset at a cheaper price than its current value. If the price goes in the opposite direction – you only use your premium.
When you buy a put option (pay a premium), you are betting that the value of the underlying asset will decrease, so you are essentially selling the underlying asset at a predetermined price (strike price) before/at the expiration of the contract, regardless of the market price at that time. If the price goes in your direction, you sell an asset at a higher price than its current value. If the price goes in the opposite direction – you only use your premium.
The above is a simple explanation of how these financial instruments work. There are a lot more sophisticated ways that they can be applied to enhance your crypto portfolio. And while they may be more complicated than purely buying and selling, they reduce your capital risk significantly.
So if you are trading and investing in cryptocurrencies, and capital preservation is your number one goal (as opposed to making gains), then crypto options are for you. Let’s look at the top 12 crypto options tokens by market capitalization below:
AntiMatter Governance Token
Antimatter B2 is a decentralized crypto options exchange platform built on the Binance Smart Chain. It consists of four components: Antimatter Invest – a decentralized options trading platform, Bull and Bear Tokens (live on BSC, ETH, Arbitrum, AVAX), NFT Dapp (live on BSC, ETH, Arbitrum, AVAX), and Antimatter DAO. MATTER is the governance token. It is available on Uniswap (V2), KuCoin,Gate.io, and MEXC.
Hegic
Hegic is an on-chain options trading protocol powered by hedge contracts and liquidity pools on Ethereum. The hedge contracts are non-custodial and censorship-resistant. The Ethereum Virtual Machine (EVM) executes the code autonomously. HEGIC is its native governance token. Hegic runs two liquidity pools for ETH and DAI. Stakers get rewarded with a 100% distribution of the fees every quarter. HEGIC tokens are available on Binance, MEXC, and Uniswap (V2).
Deri Protocol
Deri is a decentralized protocol for trading crypto options. It operates on the Binance Smart Chain and allows users to trade, hedge, or arbitrage. It runs on liquidity pools playing the roles of counterparties for users. Deri protocol tokenizes risk exposure as NFTs so that they can be imported into other DeFi projects when withdrawn. DERI is the native governance token. Deri Protocol tokens are currently available on MEXC, Gate.io, and PancakeSwap (V2).
Oddz
Oddz is a multi-chain options and derivatives trading platform that operates on Avalanche Binance Smart Chain, Polkadot, and Ethereum, enabling users to trade customized options, and earn rewards. It leverages layer-two solutions and relayer networks to solve the latency and lower the gas fees for Ethereum transactions. ODDZ is the native governance token. The token is available on Uniswap (V2), MEXC, Gate.io, and KuCoin.
Hedget
Hedget is a decentralized options market developed for Binance Smart Chain and Ethereum. HGET serves as the governance token of the Hedget platform. The token holders can vote and stake to earn rewards. The Hedget platform charges 0.04% for taker fees and 0.02% for maker fees. ETH gas fees apply if using the Ethereum network to trade. The HGET token is available for purchase on FTX, Uniswap (V2), and Gate.io.
Powertrade Fuel
Powertrade Fuel is a derivatives and options trading platform built on the Ethereum network. It features a mobile-first trading experience designed to be simple and fast. The PowerTrade Fuel Token (PTF) is a DAO token that governs the treasury that covers PowerTrade traders in the unlikely event of a black swan. It also features staking pools, where liquidity providers can stake tokens and earn rewards. The PTF token is currently available for purchase on Uniswap (V2).
Auctus
Auctus is a decentralized non-custodial options protocol built on Ethereum. It allows users to trade, mint, and exercise call or put options in a trustless and decentralized way. AUC is the native governance token. Holders of the token get discounted trading fees. They also get staking rewards and voting rights. The AUC token is available on 1inch, UniSwap, and Pancake Swap.
FinNexus
FinNexus is a decentralized options exchange that makes it simple to buy and trade bitcoin, Ethereum, Chainlink, Synthetics, and MakerDAO options on Ethereum and Wanchain. FNX is the protocol’s native governance token. Users can provide liquidity or stake their FNX tokens to earn rewards. FNX tokens are available on Uniswap, SushiSwap, and MEXC.
Dopex
Dopex is a decentralized cryptocurrency option trading platform. It was launched on Arbitrum, a layer-two scaling solution of Ethereum that utilizes optimistic rollups. Options on Dopex mirror Deribit, the market leader in cryptocurrency options. Dopex offers European-style options, meaning they can only be exercised at expiry and not before. DPX is the native governance token for the protocol. Users can stake DPX to earn rewards. DPX is available on Uniswap and SushiSwap.
Premia
Premia is a decentralized cryptocurrency options exchange that uses an automated market maker (AMM) system. It aims to deliver the best prices to users while bringing peer-to-pool derivatives trading and capital efficiency to decentralized finance (DeFi) options. PREMIA is the native governance token. It facilitates the buying and selling of options contracts, allowing users to earn a market yield on DeFi assets, and offers protection through hedging risks. Premia tokens are available on Sushiswap.
Siren
SIREN is a distributed platform on Ethereum that allows users to create, trade, and redeem fully-collateralized options contracts for any ERC-20 token. It tokenizes both sides of an option contract through Bilateral Tokenization for call (long) or put (short) options. It also uses automated market-making (AMM) protocols to create a seamless trading experience. SI is the native governance token. Users can stake their tokens to earn rewards. SI tokens are available on Uniswap V2.
RISQ
RISQ is an on-chain options trading decentralized exchange and automated market maker (AMM) built on the Binance Smart Chain. The protocol aims to provide risk and asset management options for multiple blockchains, including Binance Smart Chain, Polygon, and Ethereum. RISQ is the native governance token. Token holders can stake lots (10,000 RISQ) to provide liquidity and earn rewards. RISQ is available for purchase on Pancake Swap.
Should You Trade Crypto Options?
Options contracts are popular because they are seen as a less risky way of trading. You only lose the premium or betting amount if things don’t go your way. However, they are more sophisticated and require a lot more analysis, as there are numerous ways they can be applied. It is advisable to do your research and remember to practice – before dipping your feet in your first options trade.
