# How Does a Miner Use a Put Option to Lock in the Value of Their Future Cryptocurrency Earnings? ▴ Learn

**Published:** 2025-11-18
**Categories:** Learn

---

## How Does a Miner Use a Put Option to Lock in the Value of Their Future Cryptocurrency Earnings?

A miner can buy a put option, giving them the right, but not the obligation, to sell their future-mined cryptocurrency at a predetermined strike price. This sets a floor on their selling price, guaranteeing a minimum revenue for their mining efforts, thereby hedging against the risk of a price drop before they can sell the mined coins.

Provide a Simple Example of a Protective Put Strategy for Bitcoin

How Does “Floor Price” Relate to the Valuation of an NFT Collection?

How Does a Put Option Provide a Similar Hedging Function to a Short Futures Contract?

Define a ‘Protective Put’ Strategy for Hedging a Long Crypto Position

## Discover More

- 
### [How Does a Time-Lock Mechanism Mitigate the Risk of a Malicious Upgrade?](https://crypto.greeks.live/learn/how-does-a-time-lock-mechanism-mitigate-the-risk-of-a-malicious-upgrade/)
![This abstract, macro depiction showcases a juxtaposition of highly polished surfaces bisected by a dark, definitive line, suggesting instantaneous contract execution or a hard fork event. The central hub features layered components a blue cap atop brass ring hardware over intricate, machined metallic plating reminiscent of complex algorithmic trading infrastructure or perhaps an escrow collateral mechanism. The visual dichotomy reflects the bifurcated state of asset settlement or the risk/reward profile inherent in leveraged futures contracts. Deep focus highlights the precise engineering necessary for resilient on-chain governance and high-frequency liquidity provisioning within decentralized exchange environments, modeling concepts like oracle data feeds interacting with smart contract logic for options payoff determination, emphasizing minimized slippage across volatile crypto asset pairings.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Engineering-Visualization-of-Decentralized-Finance-Automated-Market-Maker-Mechanism-Dynamics.jpg)

It enforces a delay between upgrade approval and execution, giving the community time to review and potentially cancel a malicious or flawed change.

- 
### [What Is ‘Miner Extractable Value’ (MEV)?](https://crypto.greeks.live/learn/what-is-miner-extractable-value-mev/)
![A precisely machined, dark metallic gimbal supports a sharply faceted crystal prism exhibiting a gradient from deep azure to pale seafoam green, suggesting temporal divergence in derivative pricing models. This apparatus symbolizes the delicate calibration required for accurate volatility surface mapping across decentralized perpetual swaps. The base features etched radial markings analogous to astronomical or timing conventions, perhaps referencing settlement periods or block finality. The structure embodies the inherent complexity in calculating Black Scholes adapted metrics for non-custodial options liquidity provisioning and the inherent risk management of novel digital asset structured products requiring robust oracle integration. This visualization represents algorithmic precision navigating stochastic process risk in high-frequency quantum resistant ledger environments.](https://crypto.greeks.live/wp-content/uploads/2025/10/Crystalline-Stratification-of-Decentralized-Finance-Volatility-Index-Within-Automated-Market-Maker-Mechanism.jpg)

Profit miners/validators can earn by reordering or censoring transactions within a block, often through arbitrage or front-running.

- 
### [What Is the Role of a “Hash Time Lock Contract” (HTLC) in Atomic Swaps?](https://crypto.greeks.live/learn/what-is-the-role-of-a-hash-time-lock-contract-htlc-in-atomic-swaps/)
![This stylized visualization presents intricate electromechanical actuators resembling intersecting arrowheads against a deep void and muted beige arc, suggesting high-precision technological execution within decentralized finance architecture. The metallic teal mechanisms, featuring bundled conduits resembling complex wiring harnesses and finely machined ferrules, embody the rigorous settlement finality required for complex financial instruments. Concepts like collateralized debt positions smart contracts and automated market maker invariant calibration are implied by this symmetric yet dynamic construction. This visual metaphor speaks to the atomic nature of cross-exchange liquidity provisioning and the robust infrastructure underpinning non-custodial protocol interaction vital for advanced derivative yield generation.](https://crypto.greeks.live/wp-content/uploads/2025/10/Advanced-Mechanistic-Depiction-of-Cross-Chain-Atomic-Swap-Execution-Primitives-Underneath-Curve-Protocol-Structures.jpg)

HTLCs use cryptographic hash locks and time locks to enable trustless, cross-chain, "all or nothing" asset exchange.

- 
### [How Does a Perpetual Future Differ from a Standard Futures Contract?](https://crypto.greeks.live/learn/how-does-a-perpetual-future-differ-from-a-standard-futures-contract/)
![Sharp geometric planes of high-gloss materials, featuring muted beige, deep navy, and cyanic reflections against a void black background, suggest a moment of precise system execution. This abstraction symbolizes the finality of on-chain settlement mechanics where derivatives counterparties meet execution thresholds. The extruded black element resembles a data pointer or a contract expiry mechanism, illustrating the hard boundary condition defining options expiration or futures liquidation events. Focus rests on the sharp apex, representing the pinpoint accuracy required for robust cross-chain interoperability and atomic swap confirmation protocols, crucial for maintaining synthetic asset ledger integrity against systemic volatility exposure. This visual dichotomy speaks to the inherent risk managed by structured products in nascent decentralized exchanges environments.](https://crypto.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Quantized-Settlement-Layer-Edge-Case-Interaction-in-Decentralized-Finance-Protocols.jpg)

Perpetual futures have no expiration and use a funding rate; standard futures have a fixed expiration date.

- 
### [How Can Traders Use Options to Speculate on the Outcome of an Earnings Report?](https://crypto.greeks.live/learn/how-can-traders-use-options-to-speculate-on-the-outcome-of-an-earnings-report/)
![This visualization displays a centrally positioned, vertically elongated, highly faceted crystalline structure exhibiting internal electric blue discharges suggesting high energy flux or instantaneous settlement. The artifact is framed against a stark background divided diagonally into opposing monochromatic gradients one tan beige and the other teal cyan all juxtaposed against deep absolute black voids representing unexplored market depth. This configuration metaphorically represents the dynamic instability inherent in perpetual futures contracts and exotic option structures particularly within decentralized finance protocols where implied volatility models dictate premium assessment. The dual-winged form suggests a complex butterfly spread or a synthetic long/short position requiring precise delta hedging execution against fluctuating blockchain transaction throughput and potential slippage across disparate liquidity pools within a DeFi options AMM framework necessitating granular reference point management for risk parity.](https://crypto.greeks.live/wp-content/uploads/2025/10/Asymmetric-Digital-Asset-Structure-Illuminating-Complex-Option-Hedging-Strategies-Across-Market-Quanta.jpg)

Buy a straddle to bet on a big move, buy a call/put for direction, or sell an iron condor to bet on a small move.

- 
### [What Is the Difference in Maximum Loss between Buying an OTM Option and Buying an OTM Future?](https://crypto.greeks.live/learn/what-is-the-difference-in-maximum-loss-between-buying-an-otm-option-and-buying-an-otm-future/)
![The abstract visualization depicts intersecting metallic blades opening from a spherical housing against a void, symbolizing the active resolution of derivative contracts. This structure represents a finely tuned execution environment akin to a high-frequency trading engine. Key concepts emerge like volatility skew evidenced by the geometric tension, the critical delta hedging required for margin maintenance, and the precise moment of notional principal exchange during settlement. The teal-tinged blades suggest instantaneous liquidity provision, contrasting with the muted housing symbolizing foundational block structure. This illustrates the mechanics of options clearing within complex Automated Market Maker protocols and the swift finalization of perpetual futures obligations against underlying digital assets.](https://crypto.greeks.live/wp-content/uploads/2025/10/Dynamic-Aperture-Mechanism-Visualizing-Open-Interest-Contract-Settlement-in-Decentralized-Exchanges.jpg)

OTM Option: Limited to premium. OTM Future: Theoretically unlimited (undefined risk).

- 
### [How Can a Miner Estimate the Expected Variance in Their PPLNS Earnings?](https://crypto.greeks.live/learn/how-can-a-miner-estimate-the-expected-variance-in-their-pplns-earnings/)
![This schematic rendering displays polished metallic spheres atop a reflective cyan disk resembling a quantum or algorithmic trading substrate. The structure suggests a complex mechanism for measuring geometric relationships perhaps symbolizing the mapping of stochastic volatility functions within high-frequency cryptographic asset execution environments. The clear sphere dominates foreground focus contrasting the smaller brass orb indicative of asymmetrical risk exposure in perpetual swaps trading protocols. This abstraction captures the delicate equilibrium required for pricing exotic options such as digital straddles or concentration risk quantification in decentralized autonomous organization governance tokens using advanced derivatives models. The reflective surface implies real-time data integrity essential for robust oracle integration and settlement finality across cross-chain interoperability frameworks.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Instrument-Modeling-for-Decentralized-Finance-Volatility-Surface-Calibration-Analysis.jpg)

By calculating the standard deviation of the pool's block discovery times and considering the pool's average luck over time.

- 
### [What Is the Concept of the “SAFT” (Simple Agreement for Future Tokens) and Why Was It Developed?](https://crypto.greeks.live/learn/what-is-the-concept-of-the-saft-simple-agreement-for-future-tokens-and-why-was-it-developed/)
![A highly magnified, low-angle perspective captures a perfectly spherical droplet of clear fluid suspended above a complex, layered metallic surface exhibiting micro-texturing and blue-hued reflective banding, strongly suggesting a nanoscale examination of surface tension dynamics. This precise suspension models the delicate volatility skew inherent in perpetual futures contracts, where liquidity pools form a meniscus atop the underlying synthetic asset ledger. The internal refraction reveals micro-particulates, analogous to latent arbitrage opportunities within the decentralized exchange ecosystem or embedded risk within complex structured products. This visual metaphor speaks to asset tokenization stability against market microstructure noise and the critical importance of low-latency order routing in securing fractionalized collateral pools, reflecting Gamma exposure management in exotic option pricing structures.](https://crypto.greeks.live/wp-content/uploads/2025/10/Hydrodynamic-Equilibrium-of-Tokenized-Assets-on-a-High-Frequency-Trading-Surface.jpg)

A legal contract for pre-selling utility tokens as a security to accredited investors to ensure compliance during fundraising.

- 
### [How Is the Intrinsic Value of an ITM Put Option Calculated?](https://crypto.greeks.live/learn/how-is-the-intrinsic-value-of-an-itm-put-option-calculated/)
![A highly polished, conical apex, colored mint green and charcoal grey, suggests the leading edge of a digital asset projectile or a complex structured product. This visual metaphor captures the mechanics of leveraged exposure within decentralized finance DeFi protocols. The sharp terminal point signifies pinpoint market entry executing a delta neutral strategy against turbulent open interest fluctuations. The subtle blue indicator aperture hints at real time oracle feed transmission crucial for high frequency settlement of perpetual futures contracts. The composition reflects implied volatility clustering around specific strike prices necessitating accurate gamma scalping discipline. This aesthetic embodies the pursuit of alpha generation through sophisticated on chain option analytics and precise liquidation avoidance in yield farming simulations.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Engineered-Cryptocurrency-Asset-Apex-Representing-Volatility-Surface-Skew-Configuration.jpg)

Intrinsic Value = Strike Price - Current Market Price, only if the result is positive.

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