Trade Options? Here's How To Get Involved In Bitcoin

By now, Bitcoin needs no introduction. The digital asset has become the most popular cryptocurrency in the world, and people are already getting used to using it and trading it every day.

The Playbook

Do you think the Bitcoin will continue to surge? Or will it lose value going forward?

Whatever your thoughts on the issue are, binary options might offer an interesting way to play the events with relatively low collateral.

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What Are Binary Options?

Investing via binary options is just that: playing a binary event. “Binary options are limited risk contracts based on a simple yes/no market proposition like will the markets go up by the end of the trading week,” binary options trading site Nadex says.

How To Trade Bitcoin With Binary Options

Via binary options, traders can partake in the popular Bitcoin market with “limited risk, short-term contracts in a transparent, regulated marketplace.”

At Nadex, investors can find unique daily and weekly Bitcoin binary option contracts, based off the Tera Bitcoin Price Index.

Below is an example of how to trade Bitcoin using binary options.

A standard Bitcoin Binary Option may look something like: Bitcoin > 440 (3:00PM)

This means that this contact suggests the underlying price of Bitcoin will be above $440 at 3:00 p.m. If you think the answer is yes, buying the binary option might be the way to go. If you think the answer is no, you would sell the contract.

Investors should note that the price at which they would buy or sell the contracts is not the actual price of Bitcoin, but rather a value between zero and 100.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.