Options Trading on Bybit: Step-by-Step Guide & Transcript

[00:12] doing one thing. Buying and selling sports or maybe futures. This works, but you are leaving serious money on the table. money on the table. Options are a completely different game.

[00:24] And as you can see here, this is the option trades I'm currently in. And today, I'm going to break down exactly how I use Bybit options trading to make consistent profit in this market. I'm going to walk you through

[00:36] market. I'm going to walk you through everything step by step. How to set it up, how to understand what you're looking at, and how to place your first real options trade on Bybit. And if you're new here, my name is Jude, and on

[00:49] this channel, I help aspiring traders hit their first $10,000 in profits. And if that is what you're working towards, subscribe and let's get into this.

[01:02] beginning. So, before you go into the platform, let So, before you go into the platform, let me explain options simplified, because it's not complicated. People just explain it in a complicated way.

[01:18] Trading is basically buying and selling. You want to buy low and sell high to make a profit. It can be categorized into two, sports and derivative. In

[01:30] sport trading, you are buying the actual assets. So, when you go to the local market, your vendor is actually a sport trader, because they bought the goods at a lower price and are selling it to you at a higher price to make profit and to

[01:46] stay in business. It is similar to trading sports online. You buy when it is low with the intention to sell when price goes up. Now, the problem with sport trading online is

[02:01] that you can only make money when price goes up. This is what makes derivative trading appealing, because you can make money when price is going either up or money when price is going either up or down. Here, you're not buying the asset

[02:16] itself. You are betting on whether the price will go up or down. If you're correct, you make money. There are four types of derivative trading. So, we have types of derivative trading. So, we have futures, options, forwards, and swaps.

[02:30] Retail traders like you and I can only trade futures and options. Forwards and swaps are for institutions. This video is on trading options. I am

[02:42] just laying the groundwork for you to understand it before we go into trading understand it before we go into trading it. If you are already a trader, you it. If you are already a trader, you must know or have traded futures.

[02:55] The question is, how does options differ from futures, and what's advantages does it have over futures? I'm going to use a real-life analogy to explain this. So,

[03:07] this is Emeka. Emeka sells rice. >> [music] >> We are in March, and a bag of rice is $50. That's about 70,000 naira. For futures trading,

[03:21] I will go to Emeka and sign a contract saying I want to buy this bag of rice saying I want to buy this bag of rice from him in June for $51. Emeka agrees. Now, June comes. If the market price of rice

[03:37] is now $60, price has gone up. So, good for me, I'm still going to buy [music] it from Emeka for $51. In essence, I have made a profit of $9. But if in June, the price of rice went

[03:53] down to $40, I'm still going to buy it at $51 from Emeka. So, in this case, I have lost $11. Now, Emeka needs to be sure I keep to my word. So, he will require a security

[04:09] deposit from me called margin. If [music] my margin was $10, Emeka doesn't need price to drop to $40, because that is $11 loss. And

[04:21] what he has from me is $10. He will close the contract when I have made a loss of $10. This is futures trading. Now, in options, what happening here is that

[04:35] I'm going to pay Emeka a non-refundable premium >> to give me the option, that is, that is, the right to buy or not to buy at the

[04:47] contract expiration. So, if I pay, say, $3 as premium, and price is at $60 in >> [music] >> I would exercise that contract >> I would exercise that contract and would have made $9 minus the $3 I

[05:02] paid, which is $6. If price is at $40 or even much lower, If price is at $40 or even much lower, I only lose the $3 premium I paid. So, in options, my loss is limited to the premium I paid.

[05:18] >> There is no liquidation. Your account cannot be wiped out, and none of those cases where your stop loss get hit and price goes your way, that doesn't stop loss in options trading. So, as a trader, if you're always right on the

[05:34] >> [music] >> but each time your stop loss get hit, then price goes your way, options might just be what you should be Just know what time decay means, because you can be right on the direction, but

[05:47] still lose if price doesn't move fast enough before your expiration date. That is why expiration date matters, and we'll get to that. Now, another thing you have to know um between futures and options is this. If your trade is that

[06:04] price will go up, we'll call it long in futures, and we'll call it call option in options. If your trade is that price will go down, it is trade is that price will go down, it is called shorts in futures, and put option

[06:18] in options trading. Okay, that explained, let's go into how to trade options on Bybit. So, why Bybit? A lot of exchanges offer options, but Bybit's option platform is one of the cleanest I've seen. The interface is clear. The

[06:34] fees are low, and everything is settled in USDT, which means you're working with understand. Bybit also shows a P&L probability

[06:46] charts directly in the order placement window before you even click confirm. So, this kind of transparency matters when you are just starting out. All Let's go into the platform. Now, before you can trade options on Bybit, you need

[07:01] USDT in your account. So, um I'm going to open a sub account. So, under here, go to assets. You can see here that under assets, I have $1,000 in USDT.

[07:15] Now, if you don't have this, you can always um deposit USDT into your if you click on account, you have to make sure that it is in unified trading Currently, it's in funding, so I have to click on transfer and transfer this from

[07:33] click on transfer and transfer this from funding to unified trading account. Once this is done, you can now click on trade in the bottom menu here. Then, in the top menu, click on options, then you're in the options um platform.

[07:48] Here in the option platform, there are three types Bybit has. You have easy, discover, and pro. Now, you can go ahead, take your time to explore them. But what I want to focus on in this video is the pro section. Now, below is

[08:03] the options ticker. So, I have sold USDT. If I click on it, it's going to Bybit. So, we have here BTC, Ethereum, Solana, XRP, MNT, and DOGE USDT options.

[08:17] Uh let me just stick with Solana USDT options. Now, below this, you can see the call options only, the put options only,

[08:29] and if I click on all types, it shows me the both of them. Call at the left-hand side, and put options on the right-hand And of course, you have the [music] expiry date. This is very important. So,

[08:43] today is the 18th of March, 2026, and you can see here, this particular option I'm in, what is highlighted is 19th March, 2026. This one is expiring tomorrow, and it expires 8:00 a.m. UTC.

[08:59] Then the next one, if I want options that will expire on the 20th, I click on that will expire on the 20th, I click on 20th, 21, like that. Okay? And as a beginner, you really don't want to uh you you you don't want to trade options

[09:12] you you you don't want to trade options with less than 3 days to expiry. I personally prefer 3 to 5 days, because if the options expire before price moves trade. But of course, you can always

[09:25] close the trade before expiration, uh when price is moving in your direction. expiring on the 20th, so I can actually close it um right away.

[09:37] price. So, in the middle, we have the strike price. If I scroll down, I can also just see the current price of Solana. So, we have the strike price in The strike price will confuse you if you are a futures

[09:54] trader and you're new to options. So, let me make it Let me explain it and make it really clear. So, let's use a real example here. Now, the current real example here. Now, the current price of Solana is $89.93,

[10:06] And >> [music] >> I want to take a put option. Meaning that my bet is that price is going to go down. If I choose a strike price of say

[10:20] If I choose a strike price of say $94, which is higher than the current >> [music] >> it means that I'm going to pay a higher My profit, of course, will increase

[10:32] and I'm going to close this this trade in profit [music] in profit [music] as long as the price of Solana is lower than $94, which is a strike price I choose.

[10:45] On the other hand, if I choose a strike price below the current price, let's say I'm choosing $85 as my strike price. >> In this case, I will pay a cheaper premium.

[11:00] premium. My profits increases faster as price However, I am only in profit at expiration if price is below my strike price, which is $85. So, let's say price ends at $88.

[11:19] I won't get anything. If you're trading this way, which is what I do, you must not wait for the expiration to close this trade. You can close this trade if you just see price drops and

[11:31] you see good profits, you can take profit and close that trade you can take profit and close that trade even before your strike price is hit. don't want to make this video too long. If you want me to make a more advanced

[11:45] video, let me know in the comments. Now, let's place a real options trade together. This is a part most uh people skip, but this is where everything skip, but this is where everything finally starts to make sense.

[11:59] >> The way I do this, I don't just start on Bybit, okay? What I do is that I go to TradingView to conduct analysis because options is still trading, just a

[12:11] different way to enter and exit. Okay, so this is a BTC trade. Uh I'm in the in this trade. And let's do Solana because we use Solana as an example. So, this is also a Solana trade I'm also in.

[12:27] My initial idea for this trade, let me go to a higher time frame, ranging here and I expected two things to happen. One is that

[12:41] >> we'll go to this zone, right? And we go down and [music] hit a new all-time low. That is one scenario, okay? But because we're in this zone and we're here, my

[12:54] expectation is that price drops and that is the trade I took here at this point and price did drop. now. Now,

[13:08] I had intention because if you look here, this here is a break of structure. My initial idea is if price comes into this zone and gives me confirmation entry, then I'm willing to take it this trade again to take it

[13:24] higher. So, what I was waiting for is one for price to come into this zone. Now, if price did this instead, if price has come down below this, then I want to take price lower this [music]

[13:38] Then after waiting a confirmation, if it gives me a confirmation entry, [music] I'm going to go higher. If it doesn't, then to break lower and >> [music] >> um breaks down even and go much lower,

[13:54] beginning of this video. But we are right here now. I'm going to go back. So, the one-hour time frame like I said earlier, I'm saying that if good confirmation entry here, I can go higher.

[14:10] All right? So, this is on the one-hour time frame. We're going to investigate [music] if that is happening by going either to the 15-minute time frame or to the 5-minute time frame. So, on the 15 minutes, I'm not seeing

[14:23] anything yet. On the 5 minutes, I'll go there. There is still not a confirmation entry. Let me say what I mean. So, the last over here. Okay?

[14:38] >> this is a tiny swing, so I'll call it an internal swing, so I won't take this seriously. If price from here do this, this becomes a significant swing. Then I'm going to draw a line here. If

[14:54] price goes above this, this is when I'm going to take a call option because I expect price to go up. If price comes down, breaks structure here and go back,

[15:08] breaks structure here, this one becomes a change of character. As a matter of fact, let me draw it to make it clearer. So, this is what I mean. So, if price do this, okay? Do this.

[15:22] It means that we're now having a break of structure here, which makes this a swing point. And if it goes above to break it again this way,

[15:36] this becomes a change of character. So, if you have a change of character, it means that there's a very high probability that price keeps going up. So, in this case, I'll be now I will not be willing to take a call option from

[15:52] be willing to take a call option from this point. But right now, as it stands now, I'm not going to take any trade. Now, price can do this,

[16:04] break the structure, then keep going down. Okay? Just keep going down this way. I must wait for there to be a break in the opposite direction, which we now call what? A change of

[16:17] character. I can then wait for a retracement to take a call option to take this higher. Of course, this this should happen in significant area. But as it stands now,

[16:32] um I cannot take any trade here because I'm not seeing video, so you understand how these trades are taken, I'm just going to go ahead and take a call option from this point. I'll take a call option so you

[16:46] point. I'll take a call option so you know how [music] the trade works. Now, supposing I believe that price is going to probably do this, go down and keep on going to get to this point, which is very possible that price

[16:59] >> gets to this very particular point. Okay? Let's say I believe that this is going to happen. I can choose to put my strike here.

[17:14] price. Because instead of putting my strike here, I'll get it cheaper and I'll make more money as price goes up. So, this is a deal. I'm making sure that my strike is This is 91.51.

[17:30] strike price, but I want a strike price that is above um 91. So, if it's above 91, then I'm fine. So, in this case, we are taking a call option. So,

[17:42] price is currently here. So, I can't see 91, but I'm seeing 92. 92 is around here, which is still fine. So, I'm going to choose 92 as my strike price. I'm going to click on the call option side and click on go to trade.

[17:55] I have $1,000 in my wallet. And when you're trading, make sure you don't risk more than 5% of your account. So, if I'm risking 5% of this money, that is I'm risking $50. I want to

[18:08] that is I'm risking $50. I want to um buy premium of $50. Okay? So, I'll click on go to trade. Now, if you come here, we are trading Now, if you come here, we are trading Solana. Please don't do sell, do buy.

[18:22] Sell is a different thing entirely. Even if you're going um put, it's also buy you do. Now, if you check here, price is 3.35. [music] That is the price of this contract, not

[18:37] the price of Solana. So, you can see the price there in USDT. What I would do now price there in USDT. What I would do now is if I know it's 3.76, that is the price I am seeing here if I'm using limit order.

[18:51] here. I also have limit order here. Okay, let's say I want to buy at that 3.35. That's what I want to buy at cuz that is the current price. Now, what I would do is go to my calculator.

[19:04] The what I want to risk is $50. I'll divide it by the price I'm seeing here, .35. So, that's going to give me 14.9. This will now be the quantity of Solana I'm going to buy. That is 14.92.

[19:21] 14.92. Or I have to enter Solana as quantity. So, 15. Okay? So, you can see here that my margin requirement is $50. What this

[19:33] is saying is the premium is $3.35, is $3.35, but I'm buying $50 worth of premium. And but I'm buying $50 worth of premium. And $50 worth of premium is 15 SOL. This is

[19:46] all set. I will then go ahead and click on buy. trade and go to below you can if I go under and go to below you can if I go under order you will see here that because I

[19:59] use limit order this trade is pending because the price is currently at um 2.75. When price gets to 3.35 that's when I'll buy again but just to make this faster I'm going to use the market order to

[20:12] and cancel this then do the same thing that I did here before 50 divided by 2 points 50 divided by 2 points 75 that will give me 18. So, I'm going

[20:25] to go ahead and use market order here and put 18 as quantity. I'll make this 19. Making my margin required about $50. I'll go ahead and click on buy. Buy.

[20:39] So, if I go here and go to trade you can see I am in currently in this position. Okay, this is simply how you place your trade. You can actually take profits, right? You can [music] do different take profit level for this

[20:55] order. So, if Solana is going to see here if the price start going up, okay, >> [music] >> my profits increases as the price goes

[21:07] going to go ahead and just close this particular trade. When I click on close so I've lost $2 while making this video. So, the same analysis you do for futures trading that is the same analysis you do for

[21:22] options um trading. So, that is how I use Bybit options trading to make money in this market. We've covered what options are, the difference between call and put options, how to fund your USDT account

[21:35] on Bybit, how to read options chain, how to place [music] your first real options things I didn't need to talk about in this video. I didn't cover delta, gamma, >> [music] >> and they matter for advanced options

[21:50] strategy. Delta tells you how much options move with price. Theta is time decay. This is your enemy when you hold too long. I will break all of this down in a future video. Here are three rules that I follow. So, rule one is never put

[22:06] more than 5% of your account into a single options trade. Never. [music] If you have $500 in your account, one trade should not be more than $25. And >> [music] >> you should even go lower than $25.

[22:21] Rule number two, always check the expiration dates. Giving yourself more expiration dates. Giving yourself more time is almost always better than less time. Don't rush the market. I've made this this mistake. I didn't check. I

[22:35] chose a period that was within one day and price didn't go my way. It was just >> [music] >> after it expires the next day price just would have made profit in that particular options trade. So, rule

[22:50] number three, don't trade options during extreme market uncertainties. When market is about to make a big unpredictable move, options premium gets very expensive. Wait for clarity. Like I said, what I do

[23:04] is just wait for confirmation at the key areas I want to take a trade from. So again, if you want to make more videos explaining my analysis, how I determine my entry for an options trade, just let me know

[23:18] in the comments of this video. I will see you in the next one.