Protective Puts

Traders commonly use protective puts as a form of “insurance” on their bitcoin holdings by limiting downside risk in the short term. Protective puts are typically used to hedge against a potential drop in bitcoin’s price. Traders can remain long bitcoin with the option to sell their bitcoin at the strike price if the price of bitcoin declines. 

Protective Put = Long bitcoin + Long put option


Trading Protective Puts

  1. Select the put option you want to trade on the options chain 
  2. Enter the number of contracts
  3. Review or Edit the Price. The top ask is the current lowest price you pay to buy the option
  4. Press Buy/Long and review your order



Was this article helpful?
0 out of 0 found this helpful