Understanding the Risks in Options Trading

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w1z4rd100Senior Member
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#1Jun 28, 2023, 03:30 AM
I've been digging into Options trading, and I'm running a little thought experiment here. So, imagine I have 0.5 BTC, and I believe BTC will hit 120k by January 19, 2025. I’m thinking about selling a Call option that expires on that date with a strike price of 100k. My reasoning is that since I think BTC will be 120k then, the buyer of that Call option won’t actually want to exercise it, which means I get to keep both the premium and my BTC. I've got a few questions: 1. Is this how options trading typically works? 2. If so, how do you figure out the price of a Call option? 3. What kind of risks should I be aware of? (I get that if I'm wrong and the price goes over 100k, I’ll have to sell my 0.5 BTC at that price on January 19.)
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