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Video Tutorial

Bitcoin Options – Payoff in dollari o in BTC


beeTrader connects to Deribit through its APIs, without any other software installed on your machine. By using this broker you have access to historical data, futures and options on the most common crypto-currencies, Bitcoin and Ethreum..

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Notes about Payoff with Deribit

Cryptocurrencies in Deribit have their values quoted against the US Dollar. If for example we own 1 BTC, we will note that our portfolio amount in USD changes, while the portfolio amount in BTC won’t change at all.
When creating options strategies or when hedging the crypto-portfolio with futures or options, there’s a need to evaluate the strategies both in BTC/ETH and in USD.
With beeTrader you can select with just a couple of clicks whether to see them in cryptocurrency or in dollars.
In the following video you will see that the Payoffs of the strategies or the single options are different from how we are accustomed to see them in other assets just because they have an exchange value that to the closing of the position could be different from the initial exchange value and therefore do not have a linear but curvilinear design. Watch the video and you’ll understand better what I mean…

Bitcoin Options – Payoff in dollari o in BTC

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Given the form that the options’ Payoff takes, the mathematical calculation of maximum risk or maximum profit in some cases would be infinite. We then have set the calculation of maximum risk and maximum profit with the Montecarlo method which is based on the standard deviation. By default it is set to 2 standard deviations, but you can change this setting in the strategy settings window, in the Montecarlo and Var tab, knowing that statistically:

1 standard deviation corresponds to a probability of 68%
2 standard deviations correspond to a probability of 95%
3 standard deviations correspond to a probability of 99%