Intro: Crypto Trading Basics
What is Crypto Trading? Is Crypto Trading Really Legal in India? If so, what is the overall risk? And how much capital is required for it? I had multiple costs like this in my mind. And it took me two to three months to complete all the research for it and after starting trading myself, I had a lot of ideas. in case you don’t know what Crypto is and how to start it, by the time you finish watching this video, you will have an overall idea for Crypto. And you will be ready to take your first trade.
Crypto vs. Stock Trading
Generally, if you trade in an Indian market, there will be stocks. there are many stocks, there are 2000, 3000 stocks. You go and buy those stocks. And after a few days, you sell them. That is trading. With respect to crypto, these stocks are called coins. Bitcoin, Ethereum, Ripple, or Solana, all these are coins. just like in these stocks, there is a fundamental company behind these stocks, similarly there will be fundamental factors behind these coins. That is the technology.
Bitcoin comes and in a block chain technology, all the transactions will go like this, and that is an ecosystem. Similarly, Ethereum came along, and it was another specific set of technologies. Using that technology, people can build applications, a particular layer for this kind of transaction slam. Similarly, Solan is another ecosystem. Like this, there is a company behind each stock, like this, there is a technology behind each coin.
If I want to buy these stocks now, what do we do as a trader? We open an account with a particular company. There are many brokers like Zerodha, Grow, Than, etc. When we open our account with that broker and buy the stocks we need, it will be listed on the NSE. Isn’t the NSE an exchange? let’s go to that NSC exchange and purchase this. This is how we trade our stocks, consider it.
How is it in crypto, if we want to buy this particular Bitcoin, what we can do is directly we can open an account with companies like Delta Exchange, CoinDCX, Witch, there are many companies like this. So, they come and act as a broker cum exchange. So, we go to them and buy this Bitcoin, Ethereum, whatever we want, we can buy it using this kind of platform.
Why Bitcoin?
Mom, there are three important reasons for trading Bitcoin. First and foremost thing is, it has daily expiration. if any options traders want to trade, it has every single day expiration. Monday to Friday or Monday to Sunday, like 24/7, every single day it has daily expiration. We can trade that. And second thing, it has much higher leverage. leverage, like I said before, it’s a double-edged sword. Like, it can definitely be favorable for you, it can be unfavorable for you. It depends on how much risk we’re taking. But the major thing is, if it has 200x leverage, we don’t need to put all our capital into it.
We can trade here even if we just draw down capital. And if you look at the minimum capital, from ₹500 to ₹1000, like, it can be because you can buy it in fractions of units. Not one share, two shares, because if you look at the overall value of just one Bitcoin, it is 1 lakh dollars. But, even if we buy one Bitcoin, we don’t need to spend that amount of money.
We can buy 0.01 Bitcoin also. since we buy in fractional units like this, the minimum capital barrier for us is very low.Third thing, Futures and Options. Since we trade in both, leverage is easy for us. If we trade with correct calculations and correct risk calculations, our rewards will be much better.
Crypto Laws and Tax in India
And with respect to the overall legality of crypto. if you look at India, crypto has been divided into two. Crypto Spot and Crypto FNO. crypto spot comes, I buy a bitcoin and hold it. Now if I buy stocks in the cash segment, does it come in the demat account or not? No, if I buy in spots, the Indian government is completely against us. That’s why they have come and imposed 30% tax, 1% TDS. But, if you do the same in futures and options, they come under the FIU unit.
All these crypto exchanges will register with this FIU. Just like our stock market comes to SEBI, these will register with the FIU unit and come there. The regulatory bodies will come with it. And secondly, when you trade in FNO, according to all the regulations of the government, it is considered to be a normal business income or it will be taxed based on your individual slab. If that is the case, there will be no flat 30% tax. This taxation will also be as per your individual income slab.
Security Concerns in Crypto
And next, if you look at the whole thing, if this crypto comes, it will be hacked, or the exchange will be down, or all the exchanges will be closed, this is just one thing. The majority reason for that is that the possibilities of hacking this crypto are much higher. Our company, or in our country, in Hong Kong, in Canada, these larger companies have closed the whole exchange. Or they have hacked and taken all the bitcoins that were on the whole exchange.
The reason for that is, the main thing is that spot trading. generally, all the transactions that you buy will be in the general ledger. People can trace it anyway. when it’s on this spot, easy people can hack it. But when it’s on FNO, there’s no possibility of hacking. Because, it’s not going to hack that centralized exchange. Like we said before, didn’t we talk about this Torrens example? There’s a centralized place in the middle, anyone can access it. That kind of thing won’t happen on FNO. Because, as far as FNO is concerned, it’s a closed circle. Whatever happens on it, everything happens on this Delta exchange.
For an example, if I buy Bitcoin, then, the money with that Bitcoin goes into this Delta. And they’ll give you a contract. Okay, you have bought 10 lots, you have bought 20 lots, a contract will come. You can base it and check it. But, hacking is impossible here. But if they close Delta Exchange like Vasarex, then the chances of that are very slim. Because now it is coming under a regulatory.
But even if it is like that, since we are new to crypto, we should trade in our initial period with the mindset that whatever capital we bring in, there is a chance that it will become zero. That is why we trade with a large number of capital, with respect to crypto, I don’t recommend it now. what is our minimum capital that we can afford to lose, trading with that only is a much better solution, a much safer solution.
Step-by-Step Guide to Your First Trade
First, how can we take our first trade? Let’s see what this platform is all about. the link to open an account on this platform is in the description. You can check it out and open an account. once you come in, you will see multiple futures like this, there will be a lot of futures. overall if you don’t have a chart based on high to low, there will be many futures like this.
I know there will be almost an 80 to near coin. what you need to focus on initially is, is there any overall volume, if you charted those volumes, which one has the highest volume, let’s just stick to that for now. if you look at the majors, Bitcoin, Ethereum, Solana, Ripple, these are the four to five coins that we will have the highest volume. to begin with, let’s look at our first Bitcoin.
If you open this Bitcoin once, you will see the chart overall. Like, you can set it to a five-minute chart for now. if you want to purchase it, you can purchase it directly, what are the features of this? Let’s see first. first, after you transfer the account, after you add funds, there will be a change margin mode here. There will be isolated, portfolio. Then you select the first isolated. After that, how do you buy it?
Leverage, Lot Sizes, and Margin Management
Now if I buy 10 lots, so how much is it going to charge me, if I buy 10 lots, I have 5 dollars. overall even if I have ₹400, it is enough. Easy, I can buy 10 dollars. every single movement here Bitcoin moves as you move, you will directly see the BNL moving. this is how you can now place your trades. you don’t need to change multiple settings anymore. When the direct comes, what ever the coins that you wanted to buy you click and buy. And similarly if you wanted to short sell you can short sell. we are going to do both just like we do in normal stock futures.
The big plus of this is that when we do it in our stocks, there are monthly contracts like January contract, February contract, right? There is no expiration date for those types of contracts. if you buy futures now, you can hold it for a year, you can hold it for two years, you can hold it for three years. There is no such thing as rollover. as far as futures are concerned, this is a leveraged instrument.
You can buy as much of our direct as you want. here you will be given leverage up to 200x. for an example, if I buy 10 lots now, as you said before, just five dollars is enough. in case you buy 100 dollars, even if it is just 50 dollars, you can buy no matter how much quantity you buy.
But always in the initial period, a 25x or 20x leverage is too much. Don’t take more than that. overall if you wanted to buy or sell this is how you can buy. now if I buy 10 lots, I will select 10 lots and give it to you. it will show me okay this is my margin requirement. This is the Estimated Liquidation Price. In case you don’t put a stop loss, we will automatically sell when this price comes. How is this calculated, based on how much margin you have left on the paste, that’s all. if I just give a place order, that’s it.
The order gets placed. if you look at the bottom, the Bitcoin for those 10 lots is already there. I had already bought 20 Bitcoins, so this is an additional addition. before this, I have already held all these. Bitcoin, Solon, Solara, Ripple are all held, overall there is no price movement. you can see it from here.
Now I am interested in Solana. if you look at Solana, if you look at Solana and see a particular lot size, it is 1:1. So 1 lot = 1 Solana. Because it is 250 dollars, 1 dollar is one, one lot is one Solana. now if you look at that, I have bought four Solanas. And overall, I have only 10 dollars in margin blocked. But if you look at my returns, almost 2000% returns.
Because it went to 2000 200 dollars. But if you look at the block, it is only 10 dollars. overall, if you look at it, many possible returns, it is possible in crypto because of the leverage. Because if you take that leverage and trade with the correct risk, your returns will be higher. But if you see this much, I have 1 lakh something now.
But in that 1 lakh, I have just purchased 10-10 dollars as if I had blocked it. Because I don’t want to take huge risk. now I am in profit of around 270 dollars. Almost 100 dollars is ₹8000. So 300 dollars can easily give you 16000 or 20-30000. But since I don’t want to take too much risk for me, I have taken this much margin block but it is okay. it is totally safe, you can change our lot size according to our risk factor.
Fee Structures and Scalping Efficiency
Another important thing is that when you come and trade in equity, you have always paid ₹20 per order. You have never paid brokerage on top of that. But when you come here, everything is not on a per order basis. Everything is on a turn over basis. That is why the charges are always high here. And since those charges are high, you should check a calculator beforehand. In case you enter now and exit now, how much fee will you get. if you come down here, there is a calculator, right? Give me that calculator.
After giving it, there will be different tabs like profit and loss. Then profit and loss will come. Go and say, I am going to trade 10 lots, I will trade 10 lots. My entry price comes and you type in what is my entry price. I will trade at ₹1,02,000. I will exit at ₹1,03,000. If I do this, this is my overall margin. only 5 dollars are blocked. And if you look at the almost PNL, it is 10 dollars. 100% returns, this is the percentage for overall returns.
If I sell 1000 dollars of Bitcoin, I am making 10 dollars of profit. this is not 1000 dollars. instead of this, I only have 100 dollars here and there, if you look at the difference between entry and exit, it is only 100 dollars. If I buy and sell a Bitcoin when it goes to 100 dollars, I am making only 1 dollar of profit. 5 dollars are blocked.
But that 1 dollar is I am making one dollar of profit. So you can design it like this. So this is your leverage now, I have 200x, so 5 dollars of margin is blocked. If I make a margin loss, the margin blockage amount will also change. So if you look at this, now it is 40 dollars blocked. If you were at 25x, it would be $40, if you were at 50x, it would be $20. If you were at 200x, it would be $5. But overall, if you look at my PNL, it hasn’t changed at all. It’s the same dollar. always stay at the highest leverage.
If you trade the same number of lots, you will have better returns if you make a profit from your side. if you always come here, if you calculate it, you will get some idea. Okay, if I go this far, I will have this much amount in my hand. calculate the trade accordingly. they have mentioned scalping in this same way. So if you were a scalper and you bought and sold within 15 minutes, you would have charges on one side only.
There would be no charges on the other side. Usually, if we buy, there would be a particular percentage of charges for that. If we sell, there would be a percentage of charges on that turn over. But if you scalped within 15 minutes, they would give a charge for that buy and sell only for that entry. There would be no charge for that exit. So if you did that scalping thing, there would be no charges on the Delta Exchange. Next coming back to the options.
Crypto Options: Daily Expiry and Strategies
If you come here and select Options, you will see that there is an expiry date on those options. today is the 23rd, 23rd expiry, 24th expiry, 25th expiry, every day expiry. And if you look at the time to expiry here every day, it is 8 hours. which means that every day, our time is 5:30 this evening, that is the expiry date. for an example, if you look at Bitcoin now, it is trading at 1200, 12300. if you look at the overall strike intervals here, it is at 200 basis points. 1 lock 1 lock 200 200 to 400 400 to 600 like that will be in 200 basis.
In case we are shorting, is it 12380 now or not? So if we are shorting that particular strike for 12400 now, look at the price of the straddle. This side is 560, this side is 550. So the overall straddle price is almost above 1100 dollars. Which means that there is a chance that this straddle price will move by 1000 dollars above or 1000 dollars below the current price, that is the overall premium. And this overall premium is our Indian markets There is an over-all straddle price above the dollar.
Which means that from the current price, there is a chance that this straddle price will move by $1000 or $1000, so this over-all premium is called. And this over-all premium is compared to our, no, Indian market and here, look at the IV. It is almost 45. If you connect here and here, 45 IV comes out and it is very huge.
If everything comes out in our country, we will say high IV if it is 10, 16. Here it is higher than that. in this case, if you were trading now, if you had taken a short straddle, if you saw it this morning, I took a short straddle. No, I had shorted both the call and put options at almost 1,02,600. So, if you look at the position below, you can see that.
I have shorted both the put option and the call option by 30 lots. And overall, if you look at my margin requirement, this is $50, this is $50. my margin requirement is $100. if you look at the call option, it is now in profit of $4. If you look at the put option, it is in loss of $2. By the end of the day, if the market does not go significantly up or down, if it is in a narrow range, then both these options will be down. One option will definitely be zero. The other option will be down even further.
If that’s the case, I put $100 and you saw the cash flow over here. So, if you look at the cash flow, how much in case margin you get if you go short and both become zero, this is $17, this is $18. So, you can make almost 20, $35 profits. Out of $100. So, $100 to $35 is almost 35% in one day. It’s not likely to come that much. But it will still be zero. So, this $18, this call, this put, this is definitely zero. Because it’s going to be traded above that level.
But even if it drops even half a notch, you can still make almost $20. So, we can make higher profits with respect to option selling by eliminating charges. there is a fee calculator like brokerage calculator. Even for options, I will give the link for that in the description. once you select the option, say for suppos I have shorted it for 550 this morning. Okay? By evening it was 50 rupees. almost complete decline. The market is not going to go up.
I have traded 30 lots. when I trade 30 lots, if you see my overall returns, $13. all charges go to Keyslam I’m making almost $13 of overall profits in case I did this on BTC options in just one leg. when I do both legs, this is a 13, that is a 13, a $26 for a margin of $100. this is what, no, the overall returns that you can make potentially you can make if the market is in a zigzag. Why do I trade from morning to evening? If I don’t trade full day, the volatility of the market is always higher in Bitcoin in the evening sessions.
The movement is bigger. But once their session ends, our session, our, no, market starts, right? From 9:00 AM to 5:00 PM. That’s a low volatility period, overall for the cryptocurrency market. Because, it’s during US time that it’s more volatile. I never trade options at night. I trade futures at night, and if not in the afternoon, I trade options in the morning. to start with, once you start with just $10. Or, start with $20.
What’s the little money that you can do? Start with that, start with the initial trade, place the first place, and you’ll get the idea. no need to open an account. I have mentioned that link in the description. just open it and it will ask you to sign up. sign up. As soon as you sign up, you will see a 10% discount applied, no applied. for all the people who open an account through my link, you will get a 10% discount off your overall trading fees.
It will be Google, no, sign up with Google. Once you have done that, what ever the Google account that you have with it, you can do that. If you have come, then almost you can sign up with it. Say for an example, if I am signing up with this particular, no, Gmail ID, then, you can log in with that Gmail ID. once the account is created, it will come up with Get Verified. So, if you have done this phone verification, this Aadhaar card verification, PAN card verification, selfie verification, that’s it. Your account will be created instantly.
After that you just have to add your bank account. If you have opened that bank account, once this verification is completed, fill in the bank account details. From there you will create an account, no, whatever the bank account that you created, from there you can transfer funds to it. It can be using IMPS or it can be using, no, normal NEFT. After that you transfer it, you can get started. first, you have transferred funds, now you are going to make your first trade. For an example, now let’s come to this particular option which is around 1000, I mean 1,02,400, let’s short both the call option and the put option.
First, let’s select our call. Call select, then I am entering 10 lots. short select. Select, always buy market. That is when it will be executed immediately. buy 10 lots. If you have always seen this, another important thing, if you have seen this buy and sell bid and ask, there will always be this difference. 591, here 600. Similarly, if you have seen here, here 532, here 547. This bid and ask will always have this difference. Because in crypto, there will not be as much volume as our Indian options. There will be a little bit of profit. But because of higher IV, there is a lot of possibility of profits for us.
So now I’ve bought 10 lots. if you look at the margin, the blocked margin is 10, no, $10. Okay, so I bought that. And if you look at that, the estimated premium received. I’m in case this particular option goes to zero, that’s how much you can make. almost you can make, no, almost $5. over all, no, estimated trading fees, and then all that stuff comes up. just place the order. Now, this put option, we’ve shorted the call option. now we’ll short the put option. So,Select the put option here. Select it and do the same, no, you click on market order, give 10 lots. The same $10 margin is blocked.
Check the confirmation. put order Bitcoin, same particular strike. place order. If you do that, that’s it. It will be an immediate place. if you come down and see, that particular strike you created. no 1,02,400, 1,02,400 call and put I have shorted 10, 10 lots. This is my B and L and it will be updated automatically.
Risk Management: Stop Loss and Volatility
In case you want to keep a stop loss, you have to set it at the target price, you can set it, for example, here I have set it at 585. So, now I have set my stop loss at 585 and I will set it at 10%, 15%, 20%, so, if I select 20%, then it will go automatically. when that 20% comes, the exit of that no trend will happen automatically. whatever the limit price that you want to set, you can set it. Or, you can also set it on the index. For example, what I always do is, I buy this index. now the market is at this level.
From here on, if the index goes up by 1%, 2%, whatever, 0.5%, you can mention it here. if you say, “If the index goes to 0.5%, I will exit it,” your no-stop-loss order will be automatically created. for example, as soon as I confirm, you will get these spikes in premium. I always put a stop loss on the index base. similarly here, let’s say you have traded the index, for example, from Markla you have brought it to the index.
After bringing it, I want to keep the stop loss at 0.5%. the index call option is right, the put option is right. In case the market, no, goes up by 0.5%, the call option will be closed. In case the market comes down by 0.5%, the put option will be closed.
That’s it. Now when I look at the end of the day, if the market in case this option, this particular strike moves up, I am happy with it. In case there is a side move, fine. The other side will be completely zero. So, you still make profit out of it. this is how you can trade your options trades.
Futures, like I said before, you just directly trade with 200x leverage, whatever the quantity that you want to buy, you buy, and you can set a stop loss for that in futures. this is how you can take your first trade. As always with crypto, like I said before, look at this from our trader perspective. If we go into too much detail or fundamentals, it will only get confusing.
Conclusion: Starting Small and Growing Safely
Let’s take it step by step, and then we can learn it going forward. But to be in a trader’s perspective, this is the overall idea of how to trade futures and options. And initially you can trade with $10, $20, $50, whatever the capital, the minimum capital you can trade, trade with that. Only then will the platform understand. And don’t take a lot of leverage. Trade with even leverage. And third thing, trade in different time periods. At night, in the morning, early morning, or at 11:00 o’clock, when you trade at different times like that, you will understand that volatility.
Okay. Bitcoin has a good movement at this time. In 15 minutes, it will move 1000, 2000-lam easily. So, when you trade at different points like that, you will start understanding the market as a whole. And going forward, we will start posting more detailed post like this. And we will see that in detail with respect to futures and options. And we will also see the fundamentals of Bitcoin there. And we will trade with our Bitcoin until live trading is complete. So, in case you have any doubts about our explanation, please mention it in the comments.