Your Guide: How to Trade Options on Uniswap?
Are you looking for new ways to add excitement to your crypto life? Maybe you’re just bored with where you are and want to look for new options. If so, you may have encountered something called “trading options”.
When researching this, you’ve probably also heard of a platform called Uniswap. If you don’t know or haven’t heard of this, don’t worry. We’ll cover everything you need to know and more. But if you have ever wondered, “How to Trade Options on Uniswap?” you’re in luck.
Today we’re going to answer this question and go over all the basics so that you can trade options like a pro. Keep reading to find out more.
Also read: BRICS: 20 Nations Attend Alliance Meeting to Talk Expansion
What is Uniswap?
First, let’s cover the basics. We’re going to break this down into as simple terms as possible so that you can fully comprehend it. So, what is Uniswap, you ask?
Uniswap is a platform that allows people to access different digital assets. They do this by leveraging what’s called a blockchain-based Smart contract to execute the trade. You’ll have two assets that are swapped out and the automated smart contracts help to rebalance after every trade.
What’s a smart contract?
Now, it’s probably best to briefly review what a smart contract is. In short, a smart contract is a way to trade between two people who may want to be anonymous, which helps scale things down on both a cost and accountability front. A smart contract helps keep trades accountable from one blockchain to another without using the traditional methods of a middleman, which can increase the costs of any sort of trade.
Can you trade on Uniswap?
Yes, of course, you can trade on Uniswap. There are a few things to know, though. For instance, to trade, you will need to have some sort of ETH or another type of ERC-20 standard token. Don’t worry if you’re not currently participating on the Ethereum network, though. You override this by simply using the MetaMask wallet, as it allows you to use it as an actual Ethereum wallet without being active on their platform.
Also read: BRICS: 20 Nations Attend Alliance Meeting to Talk Expansion
Is it expensive to trade on Uniswap?
Now, let’s talk about money. Is it ethical to trade on Uniswap? No, not really. It looks like there’s a .3% for swapping tokens, which seems relatively low. If you’re looking for something on the small side, this is probably going to be your best bet.
How do I trade options on Uniswap?
Next, let’s answer the question on everyone’s mind: How do I trade options on Uniswap? For starters, it’s pretty easy but you should familiarize yourself with a few terms. First, you want to understand the various options. You have two. You have what’s called a “call option” and a put option.
Call Option and Put Options
At first glance, these options can be a bit confusing. But, in short, a call option gives buyers the right to buy a digital asset (no obligation) for a pre-determined price before a certain date. Whereas a put option gives the seller the right to sell a particular asset at a predetermined price by a certain time.
Set up your wallet
Next, you need to ensure that your wallet is connected. Typically, Metamask is a trusted source to use. You need to connect our wallet, and then ensure your wallet has some sort of ERC-20 token available.
Trading
Now, you want to select the option you wish to trade and determine if it’s a put or a call. Then, you’ll need to indicate your “strike price” and expiration date. Then, you’re basically off to the races.
Conclusion
In conclusion, learning how to trade options on Uniswap can be a bit of a mind-boggling experience the first time around and this guide is meant to familiarize yourself with how to trade on this platform.
Of course, as with all trading, there are so many advanced techniques and strategies you could use. It all truly depends on how comfortable you are with trading. But, for the sake of this guide, we hope that you now have a better understanding of how to trade using Unsiwap.