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Puts are fine but the swings will often get you liquidated if you use too much leverage. I personally wouldn't bet against Bitcoin knowing the state of the wide

Puts are fine but the swings will often get you liquidated if you use too much leverage. I personally wouldn't bet against Bitcoin knowing the state of the wider market (stocks at all time highs, inflation fears but also Fed rate hike fears). If inflation fears kick into high gear it could be enough to push BTC back to retest the ATH

tasuki 5y ago
> Puts are fine but the swings will often get you liquidated if you use too much leverage. Isn't that the same as saying "swings will often get you liquidated if you use too much leverage"? Whether puts or whatever else, if you use too much leverage, swings will often get you liquidated. Also, I don't think the author used any leverage. He just bought puts.
- errantmind 5y ago
  Yes puts or calls can get you liquidated by swings. I was trying to get across that a lot of people are using high leverage right now to get-rich-quick and, especially in the crypto space, it is risky to the point of being unwise.. unless you have an edge with backtested, medium-term models that adequately account for the wide range of volatility, with automated take-profit / stop-loss in place.
  - anthony_barker 5y ago
    If you purchase the put you can only loose the premium. Naked puts (writing them) are another story
  - tasuki 5y ago
    > Yes puts or calls can get you liquidated by swings. No, when buying puts/calls, you can't get liquidated by swings. The worst that can happen is that they expire worthless. They could get liquidated if you borrowed money to trade them, but that's not in the nature of the put/call, that's in the nature of borrowing money to trade. In this specific instance, I understand the author bought puts with actual money, and there's no way he could get liquidated by whatever swing.
    - errantmind 5y ago
      Indeed, I should have qualified that statement with "on margin"
      - tasuki 5y ago
        Yes, if you buy anything "on margin", swings can get you liquidated. It's the margin that causes the potential forced liquidation, not the puts/calls.
anthony_barker 5y ago
Normally when you buy a put you are limited to the cost of the option.

tasuki 5y ago

> Puts are fine but the swings will often get you liquidated if you use too much leverage. Isn't that the same as saying "swings will often get you liquidated if you use too much leverage"? Whether puts or whatever else, if you use too much leverage, swings will often get you liquidated. Also, I don't think the author used any leverage. He just bought puts.

errantmind 5y ago
Yes puts or calls can get you liquidated by swings. I was trying to get across that a lot of people are using high leverage right now to get-rich-quick and, especially in the crypto space, it is risky to the point of being unwise.. unless you have an edge with backtested, medium-term models that adequately account for the wide range of volatility, with automated take-profit / stop-loss in place.
- anthony_barker 5y ago
  If you purchase the put you can only loose the premium. Naked puts (writing them) are another story
- tasuki 5y ago
  > Yes puts or calls can get you liquidated by swings. No, when buying puts/calls, you can't get liquidated by swings. The worst that can happen is that they expire worthless. They could get liquidated if you borrowed money to trade them, but that's not in the nature of the put/call, that's in the nature of borrowing money to trade. In this specific instance, I understand the author bought puts with actual money, and there's no way he could get liquidated by whatever swing.
  - errantmind 5y ago
    Indeed, I should have qualified that statement with "on margin"
    - tasuki 5y ago
      Yes, if you buy anything "on margin", swings can get you liquidated. It's the margin that causes the potential forced liquidation, not the puts/calls.

anthony_barker 5y ago

Normally when you buy a put you are limited to the cost of the option.