Option trading involves contracts that give investors the right, but not the obligation, to buy or sell a specific asset at a predetermined price before a certain expiry date. In cryptocurrency, these options are typically based on the underlying value of coins like Bitcoin or Ethereum.When engaging in option trading, two primary types exist: call options and put options. A call option allows the buyer to purchase the asset at the strike price, betting that its value will rise. Conversely, a put option gives the right to sell the asset, anticipating a decline in its price.Traders use options for various strategies, including hedging against price fluctuations or speculating on future price movements. Because options can amplify potential returns and losses, they require careful consideration and risk management. Overall, option trading provides an additional layer of flexibility and strategy for investors looking to navigate the volatile nature of cryptocurrency markets.