How to short bitcoin?
4 ways on how to short bitcoin.
1. Margin Trading
Most people start short selling Bitcoin by utilizing a margin trading platform for cryptocurrencies. With this kind of trading, you can borrow money from a broker, trade and hope that your bet pays off.
2. Direct Shirt Selling
The simplest way to short sell bitcoin is to sell off yourcurrent bitcoin at a price that you’re comfortable with. Your goal is for the bitcoin value to drop and then buy the Bitcoin again at a much lower price.
3. Binary Options Trading
Another way to short sell bitcoin is with the options trading, involving the “put” and “call” options.
A put option contract gives you the right to sell a particular amount of bitcoin that you set at a certain price at a particular time, called the strike price.
The put option receive value as Bitcoin loses its value when compared to the strike price. More importantly, you’re not obliged to sell the option if you do not want to.
Meanwhile, a call option contract allows you to buy shares in a similar way. With this contract, you can buy a particular amount of Bitcoin at a particular price until a particular date.
4. Futures Trading
You can also short sell Bitcoin in the futures market. A future is basically a contract. You, the buyer, agree to buy bitcoins at a future date at a fixed price. In this kind of trading, you want the price of bitcoin to go up. This way, when the contract expires, you can purchase the bitcoin below market price.