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.)
Understanding the Risks in Options Trading
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