Crypto investors who weathered the market’s ups and downs last year are wondering if better times are up ahead. Bitcoin’s recent jump to $23,000 has brought some relief to the trading community, sparking speculation about a bull market comeback. However, everybody knows the cryptocurrency market is often unpredictable. Prices can move quickly in either direction, fuelling optimism when the market is rising and fear when it’s falling. A volatile market can be off-putting, but there are several methods and tools that you can use to make a profit. In this article, we define what volatility is, explain how it works and show you how to use BIB Exchange’s Volatility Options.
What is volatility?
Volatility is a measure of how much the price of an asset changes over time. It is calculated by comparing the asset’s price at different points in time. The financial market is made up of bulls and bears, who compete to drive the prices of assets up and down. The Forex market changes prices relatively slowly over 24 hours, while the cryptocurrency market fluctuates prices rapidly within the same time frame. Volatility and spikes in token prices can lead to significant gains or losses for traders.
Although cryptocurrency platforms allow traders to own just a fraction of a token, it’s possible to earn more profits by investing with large amounts of money. For example, a $10,000 investment in Ethereum will earn more than a $1,000 investment. BIB designed its Volatility Options feature to give users with limited funds the opportunity to profit from both rising and falling prices.
How does it work?
BIB’s Volatility Options compares the price movement of a cryptocurrency asset and defines a range for the price to move within over a one-minute time frame. This range is called the “Within” range, and is red in colour. If the price moves outside of this range, it is referred to as the “Outside” range, and is green in colour. Traders can choose to bet on whether the price will move within or outside the range. If the price moves within the range, the trader wins; if the price doesn’t move within the range, the trader loses.
How to trade using Volatility Options
Follow these steps to learn how to trade using BIB’s Volatility Options:
- Create an account via the BIB Exchange website.
- Log in, navigate to the main bar and select “Volatility Options”.
- Decide on the amount of money that you want to invest in each trade.
- Choose the “Within” button to place a trade that’s within the range, or the “Outside” button to place a trade that’s outside of the range.
- The percentage before taking the trade determines the amount of profit, while a loss shows the total amount of money used for each trade.
- Each trading contract expires after a minute, and you’re able to execute back-to-back trades.
Related: BIB Exchange introduces a New Feature: Flash Option
Volatility Options vs. Flash Options
You may be wondering about the similarities and differences between our Volatility Options and Flash Options offerings. Both trading instruments offer a smooth trading experience and have a unique time interval of one minute. They both also allow users to execute multiple trades per day. Like other trading instruments, Volatility Options allow users to know their potential profit and loss before entering a trade. However, Volatility Options are unique in that they allow users to capitalise on the volatility level of assets by predicting whether the asset will stay within or outside of a volatility range.
Summary
BIB Exchange’s Volatility Options allows users to strategically maximise their earnings, even during a volatile market. At the core of this feature is a precise prediction mechanism that tracks the price fluctuations of assets within a one-minute time interval. Additionally, users can begin a new trade immediately after closing the previous one.