The Superior Tool to Leverage Trading

Leverage kills traders daily.

Crypto traders would never be liquidated again if they took advantage of this one tool.

Leverage trading is the most common way to access large amounts of capital. For beginners, this is a mistake.

Traders you see on Twitter making life-changing gains are more sophisticated than you or lying. Either way, you won't replicate their success.

Buffett would be the first to tell you to avoid leverage. Leverage can be fun, but can just as easily end you.

Do you want to know the secret tool?

Options.

Options provide a more sustainable way to access leverage. In crypto markets, they continue to be underutilized.

Key Traits

1️ Cost Efficient

2️ Flexible

3️ Options Strategies

4️ Hedging Tool

After paying a premium for the contract, you get access to a levered position. The option has a defined expiration date but is susceptible to losing value to time decay.

Risk is confined to the premium that was paid for a contract. Margin calls will never be a concern when using these derivatives as a bad wick will cause you to hit a liquidation price.

Let’s say you’re using 25x leverage. Every $1 the ticker goes up, you’re up $25. However, it works exactly the same when the ticker begins to go down.

Cascading liquidations wouldn’t be an issue if options usage were more prominent in the crypto space. A relevant example is $crvUSD where volatility has been contained by tapering liquidations.

Plenty of protocols offer onchain options trading. Dopex is my protocol of choice, but you're free to find what works best for you. Their most recent product line is 0DTE which sees about $1 trillion notional traded daily in TradFi.

Leverage is a tool that's a double-edged sword. Options provide easy access to leverage but are a better trading instrument if you wish to contain risk. As more traders educate themselves on options, I'm optimistic that the outlook on options in DeFi will change.