Alright, you absolute degenerate. You’re not satisfied with regular crypto’s 50% daily swings. You want leverage on your leverage. You want to trade options on magic internet money that already moves like it’s on crystal meth. You want crypto options. God help you.

I’ve been trading crypto options since 2021, back when Bitcoin was “definitely going to $100K by December” (spoiler: it didn’t). I’ve made $50,000 in a single day. I’ve also lost $30,000 in an hour. This market will humble you faster than a Mike Tyson left hook after you talk shit about his lisp.

But if you’re gonna do it anyway (and I know you are, you magnificent psychopath), at least let me teach you how to not get completely destroyed. Because unlike stocks, where losing money is a slow bleed, crypto options can liquidate you while you’re taking a shit.

What Crypto Options Actually Are (And Why They’re Insane)

Same concept as stock options – you’re buying the right to buy (call) or sell (put) Bitcoin, Ethereum, or whatever shitcoin has options now, at a specific price by a specific date. Except instead of the underlying moving 2%, it moves 20%. In an hour. On a Tuesday. For no reason except some whale decided to fuck with everyone.

The Key Differences from Traditional Options:

24/7/365 Trading

• That SPY option you bought Friday? Market’s closed, it’s safe
• That Bitcoin option? Could be worthless by Saturday morning while you’re sleeping
• I once woke up to a $15,000 loss because China “banned” crypto at 3 AM (for the 47th time)

Volatility on Steroids

• SPY implied volatility: Usually 15-20%
• Bitcoin implied volatility: 40-120% regularly
• Ethereum during DeFi summer: 200%+ IV
• Your option premiums swing more than the underlying

No Central Exchange

• Stock options: Regulated by CBOE, standard contracts
• Crypto options: Every exchange has different specs
• Settlements can be fucked
• Your exchange might not exist tomorrow

The Liquidation Game

• Traditional brokers: Margin call, time to add funds
• Crypto exchanges: Instant liquidation, no warning
• Position gone, money gone, goodbye

Where to Trade This Insanity (And Where You’ll Probably Lose Money)

Deribit – The King of Crypto Options

• 90% of all crypto options volume
• Based in Panama (because of course it is)
• Actually works (surprisingly)
• Decent liquidity on BTC and ETH
• Dogshit liquidity on everything else

Why I Use Deribit:

• Spread on BTC options: 2-3% (not terrible)
• Can actually exit positions
• Been around since 2016 (that’s ancient in crypto)
• Never been “hacked” (yet)

Why Deribit Might Fuck You:

• Unregulated (your money can disappear)
• Withdrawal limits during “volatility”
• Servers crash during big moves
• Customer service is three guys in Panama

OKX – The Asian Giant

• Second biggest volume
• Better for Asian trading hours
• More shitcoin options
• Banned in US (VPN has entered the chat)

The Good:

• More pairs available
• Deeper liquidity during Asia hours
• Better mobile app
• Integrated with spot/futures

The Bad:

• KYC getting stricter
• Regulatory risk everywhere
• Flash crashes more common
• Chinese exchanges have a history of “disappearing”

Binance – The Disappointing Giant

• Biggest exchange, shit options market
• Liquidity sucks
• Spreads will murder you
• Only worth it if you’re already there

LedgerX/FTX US (Now Dead)

• Was the regulated US option
• FTX blew up, took LedgerX with it
• Perfect example of counterparty risk
• RIP to everyone who had funds there

Traditional Brokers (CME, CBOE)

• CME Bitcoin options: For institutions
• CBOE: Discontinued
• Some brokers offer Bitcoin ETF options
• Tiny volume, huge spreads, don’t bother

The Greeks on Crystal Meth

Remember the Greeks from stock options? In crypto, they’re the same concepts but on bath salts:

Delta – The Direction Drug

• How much option moves with underlying
• BTC moves $1,000, your 0.50 delta call gains $500
• Except crypto deltas change violently
• Can go from 0.30 to 0.70 in one candle

Real Example:

• Buy BTC $40K call, delta 0.45
• Bitcoin pumps from $38K to $42K in 2 hours
• Delta now 0.75
• Position 5x’d but now risky as fuck

Theta – The 24/7 Killer

• Time decay never stops
• Weekends count (market never closes)
• Holidays count
• That monthly option loses 3.3% daily value
• Weekly options lose 14% daily

The Weekend Theta Trap:
Friday 5 PM: Option worth $1,000
Monday 9 AM: Option worth $850
What happened? Nothing. That’s the problem. You paid for weekend theta.

Vega – The Bipolar Beast

• Crypto IV swings from 40% to 120% regularly
• Your option value doubles/halves on IV alone
• News drops: IV explodes
• News fades: IV crushes
• Direction doesn’t matter if vega kills you

Vega Example:

• Buy ETH calls when IV at 45%
• ETH goes up 5% (you’re right!)
• But IV drops to 35%
• Your calls lose money despite being right
• Welcome to vega hell

Gamma – The Liquidation Accelerator

• Rate of delta change
• In crypto, gamma can turn small position into huge winner/loser in minutes
• Near expiration + crypto volatility = gamma squeeze insanity
• Why weekly crypto options are pure gambling

The Strategies That Actually Work (Sometimes)

Strategy 1: The Post-Dump Bounce Play

Everyone panic sells, IV explodes, time to sell puts.

The Setup:

• Bitcoin dumps 15%+ in 24 hours
• Everyone calling for $20K BTC
• IV shoots above 100%
• Crypto Twitter in full despair
• Funding rates negative

The Trade:

• Sell put spreads 10-15% below current price
• 7-14 days expiration
• Collect premium from panic
• Buy back when IV normalizes

Real Example – May 2024 Dump:

• BTC dumps from $45K to $38K in one day
• IV explodes to 110% (normally 60%)
• Sell $35K/$33K put spread for $500 credit
• Bitcoin bounces to $41K within 3 days
• IV drops to 70%
• Buy back spread for $100
• Profit: $400 per spread × 10 = $4,000

Win Rate: 65% (crypto overshoots both ways)
Why It Works: Panic sellers exhausted, bottom fishers appear
Why It Fails: Actual bear market, not just a dump

Strategy 2: The Pre-Event Hype Trade

Crypto loves narratives. Trade the hype, not the news.

The Best Events:

• Bitcoin halving (every 4 years)
• Ethereum upgrades (the Merge, etc.)
• ETF announcements
• Major exchange listings
• Fed meetings (crypto correlates now)

The Play:

• Buy long-dated calls 3-6 months before event
• Sell into the hype 1-2 weeks before
• Never hold through the actual event
• Ride the anticipation, not the result

Example – 2024 Halving Trade:

• October 2023: Halving in 6 months
• Buy April 2024 $40K calls for $2,000
• Bitcoin runs from $30K to $70K pre-halving
• Sell calls in March for $31,000
• 15x return
• Halving happens, Bitcoin dumps (buy the rumor, sell the news)

Success Rate: 70% for major events
Key: Sell before the event, always

Strategy 3: The Weekend Volatility Crush

Degens go wild Friday night, IV spikes. By Sunday, they’re broke and IV crashes.

The Setup:

• Friday 8 PM ET: Crypto pumping/dumping
• IV elevated 10-20% above average
• Degens leveraging up for weekend
• Asian markets about to open

The Trade:

• Sell strangles/iron condors
• 5-7% out of the money
• Expiring Monday/Tuesday
• Collect elevated weekend premium

Typical Example:

• BTC at $44K Friday night
• Sell $46K call and $42K put
• Collect $1,000 total premium
• Sunday afternoon: BTC at $44.5K
• Buy back for $600
• Profit: $400 (40% in 48 hours)

Monthly Stats:

• Win rate: 73%
• Average win: $400
• Average loss: $1,200
• Net profitable but variance is high

Warning: One 30% weekend move wipes out 3 months of profits

Strategy 4: The Funding Rate Arbitrage

When futures funding is extreme, options provide better risk/reward.

Positive Funding (Everyone Long):

• Funding rate > 0.10% per 8 hours
• Market overleveraged long
• Buy puts as hedge

Negative Funding (Everyone Short):

• Funding rate < -0.10% per 8 hours
• Market overleveraged short
• Buy calls for squeeze

Why This Works:

• Extreme funding unsustainable
• Liquidations cascade
• Options profit from violent moves

Strategy 5: The Shitcoin Announcement Play

For the true degens. New listings create option opportunities.

The Play:

• Major exchange announces new token listing
• Buy calls on listing day
• Sell within 48 hours
• Never hold longer

Example – BLUR on Binance:

• Announcement: BLUR listing tomorrow
• Buy weekly 20% OTM calls
• BLUR pumps 40% on listing
• Calls go 10x
• Sell immediately

Success Rate: 30% (but winners are huge)
Risk: Most new listings dump after initial pump

Risk Management (Or How Not to Lose Everything)

Position Sizing in Crypto Options

The 1% Rule is Now 0.5%

• Crypto can move 50% overnight
• Options can go to zero faster
• Never risk more than 0.5% per trade
• On a $10K account, max risk is $50

Why So Conservative?

• Flash crash from $48K to $42K: Your calls are dead
• Exchange goes down: Can’t exit
• Liquidation cascade: No bids for your options
• Regulation news: Market vanishes

The 24/7 Stop Loss Problem

You can’t use stop losses. Market never closes. Solutions:

Alert System:

• Set price alerts on phone
• Wake up for major moves
• Accept you’ll miss some
• Or accept you might wake up broke

Position Sizing Solution:

• Trade so small that max loss won’t hurt
• If losing position keeps you awake, it’s too big
• Better to make less than lose everything

Time-Based Exits:

• Close all positions Friday if up
• Never hold weeklies over weekend
• Take profits before you sleep

The Liquidation Math

Crypto exchanges will liquidate you without warning:

Deribit Example:

• Initial margin: 10% of position
• Maintenance margin: 5%
• If account drops below maintenance: Auto-liquidation
• No margin call, no email, just gone

Protection Strategy:

• Keep 50% of account in cash always
• Never use max leverage
• Multiple accounts for risk distribution
• Withdraw profits regularly

The Unique Bullshit of Crypto Options

Exchange Risk (The FTX Lesson)

• Not your keys, not your coins
• FTX had options, now it’s gone
• Mt. Gox, QuadrigaCX, more will follow
• Trade like exchange might disappear tomorrow

Risk Mitigation:

• Multiple exchange accounts
• Withdraw profits weekly
• Never keep life savings on exchange
• Accept exchange risk or don’t trade

The Manipulation Reality

How Whales Hunt:

1. Whale buys $10M in calls
2. Market buys spot to pump price
3. Retail FOMOs into calls
4. Whale sells calls to retail
5. Whale dumps spot
6. Retail calls worthless

Happens Every Week:

• Thursday: Pump to liquidate shorts
• Friday: Dump to kill weekly calls
• Weekend: Chop to collect premium
• Monday: Opposite of weekend move

Defense: Trade their patterns, don’t fight them

The Tax Nightmare

Every trade is taxable. In crypto, that’s hell:

The Problems:

• Each option trade: Taxable event
• Exercise: Taxable event
• Settlement: Taxable event
• Converting to USD: Taxable event
• Moving between exchanges: Possibly taxable

Real Example:

• 500 option trades in 2023
• 300 wins, 200 losses
• Net profit: $30,000
• Tax forms: 47 pages
• CPA bill: $2,000
• Actual profit after taxes: $18,000

Solution: Get a crypto-specialist CPA or go to jail

The Funding Cost Reality

Holding positions costs money:

Deribit Fees:

• Trading fee: 0.03% (maker) to 0.05% (taker)
• Settlement fee: 0.02%
• Delivery fee: 0.015%
• Holding overnight: Funding rate applies

Annual Cost Example:

• Active trading: 3-5% in fees
• Plus spread costs: 2-3%
• Plus funding: 10-36%
• Total drag: 15-44% annually

This is why most traders lose even when right about direction.

When to Trade Crypto Options (And When to Run)

Best Trading Times

US Market Open (9:30 AM ET)

• Crypto correlates with stocks now
• Big moves often happen here
• Liquidity improves
• Traditional traders enter

Asian Session (8 PM – 2 AM ET)

• Crypto’s prime time
• Maximum degen activity
• News often drops
• Biggest moves happen

Sunday Afternoon

• Lowest volume of week
• Biggest moves relative to volume
• Perfect for iron condors
• Or complete disaster

Worst Trading Times

Friday Night to Saturday Night

• Peak degen gambling hours
• Manipulation extreme
• Spreads widen
• Drunk trading everywhere

During Fed Announcements

• Everything correlates
• Volatility extreme
• Exchanges may crash
• Better opportunities elsewhere

Chinese New Year

• Seriously, look it up
• Weird shit happens
• Low liquidity
• Manipulation increases

Real Examples of Wins and Losses

The $50K Win (Pure Luck)

March 2023 – Banking Crisis Trade:

• Silicon Valley Bank collapses Friday
• Everyone panic selling everything
• BTC at $20K, looks terrible

The Trade:

• Sunday night: Buy 50 BTC $22K weekly calls at $100 each
• Cost: $5,000
• Thesis: Crypto might benefit from bank fears

The Result:

• Monday: BTC pumps to $24K
• “Bitcoin fixes this” narrative emerges
• Calls worth $2,100 each
• Sold for $105,000 total
• Profit: $100,000

The Truth: 90% luck, 10% thesis. Could have easily gone to zero.

The $30K Loss (Pure Stupidity)

November 2022 – FTX Collapse:

• FTX drama unfolding
• BTC at $18K and falling
• “This has to bounce” mentality

The Trade:

• Buy 100 BTC $19K calls
• Cost: $30,000
• Expiring in 3 days
• “Oversold bounce incoming”

The Result:

• FTX officially bankrupt
• BTC drops to $15.5K
• Options expire worthless
• Loss: $30,000
• Lesson: Don’t catch falling knives

The Consistent Winner

Weekly Iron Condor Strategy:

• Trade size: $5,000 risk per week
• Win rate: 68%
• Average win: $1,500
• Average loss: $5,000
• Monthly result: +$2,000-4,000

Why It Works:

• Small, consistent gains
• Defined risk
• Time decay advantage
• Not trying to predict direction

The Mental Game (Or How to Not Go Insane)

Crypto options will mind-fuck you harder than anything:

The FOMO Destroyer

• You’ll see someone turn $1K into $1M
• You’ll think you can too
• You can’t
• They got lucky once
• They’ll give it all back

The 24/7 Addiction

• You’ll check prices at 3 AM
• You’ll trade drunk at 2 AM
• You’ll make decisions while half asleep
• You’ll dream about candlesticks
• This isn’t healthy

The Hopium Dealer

• “Bitcoin to $1M by 2025”
• “ETH flipping Bitcoin next month”
• “This shitcoin is the next Bitcoin”
• It’s all bullshit
• Trade reality, not dreams

The Despair Pit

• Down 80%: “Crypto is dead”
• Options worthless: “I’m done”
• Account blown: “Never again”
• Two weeks later: “This time is different”
• It’s not different

Why You Probably Shouldn’t Trade These

Real talk? 99% of people should stay the fuck away from crypto options:

1. The volatility will eventually blow you up

• One 50% move wipes out months of gains
• Black swans happen monthly in crypto
• Risk management is nearly impossible

1. The exchanges aren’t regulated

• Your money can disappear
• No SIPC insurance
• No real recourse
• Exchange can change rules anytime

1. The market never closes

• You’ll never sleep properly
• Constant stress
• Relationship killer
• Health destroyer

1. The manipulation is real

• Whales control the market
• Exchanges trade against you
• Insider trading everywhere
• You’re the exit liquidity

1. The tax implications are brutal

• Every trade taxable
• Nightmare to track
• Easy to owe more than you made
• IRS doesn’t understand crypto

If You’re Still Interested (You Degenerate)

Start Like This:

Month 1-2: Education

• Paper trade only
• Learn the platforms
• Understand the Greeks
• Watch the patterns

Month 3-4: Tiny Trades

• $100 maximum risk per trade
• Focus on learning, not earning
• Journal everything
• Expect to lose it all

Month 5-6: System Development

• Find one strategy that works
• Backtest it thoroughly
• Forward test with small size
• Refine and repeat

Month 7+: Slow Scaling

• Only scale if profitable
• Never risk more than 5% of account
• Take profits regularly
• Remember why most fail

The Bottom Line

Crypto options are the most degenerate form of trading that exists. It combines the complexity of options with the insanity of crypto and the corruption of unregulated markets. It’s financial Russian roulette with five bullets in the chamber.

But…

If you understand the risks, manage position size religiously, accept that you’re gambling, and get lucky with timing, you can make absolutely stupid amounts of money. Just remember: For every guy posting 100x gains on Twitter, there are 1,000 others who lost everything and stayed quiet.

The market is designed to transfer money from impatient degenerates to patient whales. Don’t be the impatient degenerate.

Final Rules:

• Trade tiny (smaller than you think)
• Take profits (greed kills)
• Never use money you need
• Expect to lose it all
• Don’t mortgage your house for magic internet money options

And for the love of Satoshi, when you inevitably make some money, take most of it off the exchange. Because when the music stops – and it always does – you don’t want to be the one without a chair.

Remember: In crypto options, you’re not investing. You’re not even trading. You’re gambling in a casino where the house can change the rules, close the doors, or disappear with your money at any moment.

Trade accordingly.