What Is the Primary Purpose of Using Crypto Options for Hedging?
Hedging with crypto options aims to mitigate the risk of adverse price movements in an existing crypto portfolio. For example, a holder of Bitcoin can buy a put option to protect against a significant price drop.
If the price falls, the profit from the put option offsets the loss on the underlying Bitcoin. This allows the investor to maintain their long-term crypto position while limiting downside exposure.
