UpDown Options

Information on UpDown Options in the Crypto.com App, covering common queries and scenarios that users may encounter while trading.

Valery avatar
Written by Valery
Updated over a week ago

About UpDown Options

What are UpDown Options?

UpDown Options are a special type of option that automatically gets terminated (or ‘knocked out’) if the underlying asset’s price hits a predetermined ceiling or floor price, locking in your profits or protecting you against big losses.

You can choose to buy or sell a contract depending on which way you think the market will go:

  • If you think an asset’s price will go up, you can buy a contract to open a long position.

  • If you think an asset’s price will go down, you can sell a contract to open a short position.

UpDown Options enable you to manage risk because you will know the maximum possible loss or profit upfront.

To learn more, check out our University article.

Are UpDown Options regulated in the US?

Yes, UpDown Options are offered by Crypto.com | Derivatives North America, which is operated by North American Derivatives Exchange, Inc. (Nadex) and is subject to US regulatory oversight by the Commodity Futures Trading Commission (CFTC).

Contract Specifications

Visit the Crypto.com website for contract specifications.

Supported Cryptocurrencies

UpDown Options are available for the following cryptocurrencies: BTC, ETH, LTC, BCH, DOGE, AVAX, LINK, DOT, SHIB and XLM.

Trading Hours

Crypto.com | Derivatives North America is open for Crypto UpDown Options trading at 11pm ET Friday and expire at 4:15pm ET the following Friday unless the contracts are knocked out beforehand.

Weekly maintenance periods occur between 4:15pm - 11pm ET every Friday. During the maintenance periods, UpDown Options are not available to trade.

For updates, holiday schedules, and contract availability, see the Holiday and Hours page and the Notices page on the Crypto.com | Derivatives North America website.

Onboarding

To trade UpDown Options, you will need to set up an account with Crypto.com | Derivatives North America:

  1. Go to UpDown Options from the home screen banner in the Crypto.com App

  2. Walk through the UpDown Options tutorial

  3. Set up your USD Fiat Wallet if you have not done so already

  4. View price charts and the available contracts for UpDown Options

  5. Select Enable UpDown Options

  6. Read the Terms & Conditions before accepting them and tap Confirm

  7. Complete the Qualifying Questions and tap Continue

  8. You will receive an in-app notification and email when your account is approved

Funding

UpDown Options is a fully collateralized trading product. You need to have sufficient funds in your USD Fiat Wallet to trade UpDown Options. The calculation for your available balance excludes unsettled funds (i.e. via Instant Deposit). Visit our Help Center for more information on USD deposits with Wire Transfer and ACH Direct Deposit.

Trading

What are Long/Short Positions?

If you think an asset’s price will go up, you can buy an UpDown contract to open a long position.

  • The Target Price will be higher than your Entry Price and is the level that automatically takes profit.

  • The Stop Level will be lower than your Entry Price and is the level that automatically stops your losses.

If you think an asset’s price will go down, you can sell an UpDown contract to open a short position.

  • The Target Price will be lower than your Entry Price, representing the maximum profit potential.

  • The Stop Level will be higher than your Entry Price, where your losses will be limited.

What are the Limits for UpDown Options?

Position Limits

A position limit defines the maximum aggregate position you can hold for UpDown Options per underlying crypto market. The position limits for UpDown Options are set at 250 for any available tokens.

This means you can have a maximum of 250 open positions for LTC and 250 for BCH. The open position count includes both long and short positions across all available contracts for the underlying market.

Example:

  • You have an initial open long position of 240 LTC contracts.

  • You believe the price of LTC will go up and buy 5 more contracts with a Target Price of $20,100.

  • If you believe the price of LTC will continue to go up, but do not want to close your position and would like to buy 8 contracts with a Target Price $20,300, this trade will be unsuccessful, as there would be a total of 253 open positions. Instead, you would be able to buy 5 LTC contracts with a Target Price of $20,300, bringing your total open position count to 250.

  • If you believe the price of BCH will fall and sell 8 contracts with a Target Price of $1,200, this trade will be successful. It would result in you having 245 open positions for LTC and 8 open positions for BCH from your trades.

Order Limits

There are no order limits when trading contracts for any available tokens in a single order.

What Order Type does UpDown Options support?

The orders you submit to trade UpDown Options are Market Orders (“MO”) with protection on an Immediate-or-Cancel (“IOC”) basis.

An MO with protection is a request submitted to buy or sell a set number of UpDown Option contracts at the displayed market price when the order is submitted. In the event that the displayed market price is no longer available when Crypto.com | Derivatives North America receives the order, the MO with protection order will be acceptable to fill within the Slippage Tolerance (see next question).

An IOC order demands immediate execution or cancellation. It can be filled in whole or in part, with any remaining quantity automatically canceled. This is also known as Partial Fill.

Prior to 13 June, 2023, UpDown Options orders were MO with protection on a Fill-or-Kill (“FOK”) basis. While an FOK order also demands immediate execution or cancellation, it permits your order to be offered or bid one time only. If the entire order is not filled immediately, it is then automatically canceled.

What is Slippage Tolerance?

Slippage Tolerance allows your trade to be completed even if the coin's price moves from the time you place the order to the time it is executed. It is a predetermined number of points, expressed as a dollar value, away from the displayed market price that will be acceptable to fill the MO with protection order.

If the coin’s price movement is within the tolerance you set and the full order quantity can be fulfilled, your order will be executed. If the coin’s price movement exceeds the tolerance you set, your order will not be executed because partial order fulfilments are not accepted.

How to set Slippage Tolerance?

The default tolerance per contract is US$15. It can be adjusted between US$1-25 by tapping on the Settings icon on the top-right corner of the UpDowns page.

The higher your Slippage Tolerance, the more likely your order will be executed. Orders exceeding your set tolerance will not be filled.

What are the differences between Contract Price and Token Price?

  • Contract Price: The contract price is the price at which a contract can be bought or sold.

  • Token Price: The token price represents the current value at which the token is being traded on the open market. You should always refer to the token price displayed on the Derivatives product section in the App for your trades.

Why might I see different prices for the same asset on different screens within the App?

UpDown Options have a bid price for users that want to sell the contract, and an ask price for users that want to buy the contract. The difference between these two prices is the bid-ask spread.

When there is high liquidity in the market, the spread is typically narrower. On the other hand, during periods of low liquidity with fewer quotes, the spread will be wider. It is always important to note the price you are committing to prior to a buy or sell trade.

For UpDown Options, the contract price is in the range of the token price. However, these two should not be confused with each other. Trading UpDown Options is not the same as buying the token on the spot market at the market price; instead, you will be trading on the contract’s respective bid or ask prices, depending if you are selling or buying the contract.

Trading Screen

Order Input Screen

Position Details Screen

Close Position Screen

What happens when there is insufficient liquidity in the market?

When the market has insufficient liquidity, it means there is no party offering to match the other side of the order. You will either see there are no price quotes available to place your trade or your trade will not be executed.

Simply put, if you want to buy a contract, there must be another party selling it to match your purchase order, and vice versa.

Possible Reasons for Insufficient Liquidity Include:

  1. Near Expiry Time: As the expiry time of an UpDown Options contract approaches, there is less time for the price to move significantly to impact profitability. This leads to fewer parties, or none at all, willing to take the less desirable side of the trade. For example, if you wanted to exit a position that is loss-making, the other party matching your order will have limited time to turn a profit.

  2. Token Price Close to Target or Stop Prices: If the current price of the underlying token is very close to either the Target or Stop prices of the UpDown Options, the probability of the contract expiring profitably for a long position is either very high or very low respectively. If you want to exit a position when the price is close to the Stop level, the other party matching your order will have a higher likelihood of being knocked out at loss and may not be willing to make the trade.

Getting Started with UpDown Options Trading

Opening a position

  1. Select BTC or ETH as the underlying asset

  2. Determine if you think the price of the asset will go up or down in the coming days

    1. If you think the asset’s price will go up, you can buy a contract to open a long position

    2. If you think the asset’s price will go down, you can sell a contract to open a short position

  3. Select one of the 4 available contracts and see the Target and Stop Levels reflected on the price chart

  4. Select the number of contracts you would like to trade and tap Review

  5. Review your order and tap Confirm

  6. Complete biometric or passcode verification

  7. Your order is placed. You will receive an in-app notification when your order is filled or rejected.

After you open a position, one of the following will occur:

The contract expires

Each contract has an expiry date. When the contract expires, your position is automatically closed and the profit/loss is realized.

The contract expiry date can be found under Open Position Details or Order History Details.

The position is knocked out

When the indicative price of the underlying asset hits the Target Price of the contract, your position is automatically closed and you will receive the maximum payout, excluding fees.

When the indicative price of the underlying asset hits the Stop Level of the contract, your position is automatically closed and you will take a loss on your trade.

When your position is knocked out, you will receive a push notification.

You proactively close your position

There are two ways you can close your position:

Method 1:

  1. Select the position you would like to close under the Open Positions tab

  2. Tap Close Position

  3. Select the number of contracts you would like to trade

  4. Tap Close Position and Confirm

  5. Your order is placed. You will receive an in-app notification if your order is filled or rejected.

Method 2:

  1. When you are placing a trade via the Open Position tab, and you selected a contract that you have an open position in (the opposite direction)

  2. Select the number of contracts you would like to trade and tap Review

  3. You will automatically be prompted to close your position before placing a new order

  4. Select the number of contracts you would like to trade

  5. Tap Close Position and Confirm

  6. Your order is placed. You will receive an in-app notification if your order is filled or rejected.

Example for Method 2:

You believe the price of BTC will go up and buy 2 contracts to open a long position. Afterwards, you change your forecast and think the price of BTC will go down instead. You select the same contract instrument in the ‘down’ direction and select 2 contracts to submit a sell order. As you cannot have a long and short position opened at the same time for any contract instrument, you will automatically be prompted to close the long position you had with this sell order.

How do I calculate the amount I’ll pay to enter into a trade?

Before confirming your order to place your trade, you will review the Indicative Amount you need to pay.

The Indicative Amount is the difference between the Current Price and the Stop Level, plus fees and your set Slippage Tolerance, taking into account the Tick Size and Tick Value of the contract. This amount will be held on your USD Fiat Wallet until your order is filled or rejected.

When your order is filled, the actual amount you pay will be reflected in your Order History. This will be the difference between the Trade Price and the Stop Level, taking into account the Tick Size and Tick Value of the contract, plus fees. Your maximum loss is the cost you put into the trade.

Example 1 - You open a long position:

ETH’s price is $1,850 and the contract you would like to buy has a Target of $2,000 and Stop of $1,750 with Tick Size 1 and Tick Value 2.5. Your Slippage Tolerance is set at $5 per contract and you buy 2 contracts.

The Indicative Amount you need to pay before confirming your order will be:

((Difference between the Current Price and Stop Level) * Tick Value / Tick Size + Slippage Tolerance + Exchange Fee + Technology Fee) * 2 contracts

= ((1,850 - 1,750) * 2.5 / 1 + 5 + 1 + 0.99) * 2 contracts

= $513.98

A hold will be put on your USD Fiat Wallet for this amount.

Your order was filled at $1,851.

The actual amount you paid to open 2 long positions is:

((Difference between the Trade Price and Stop Level) * Tick Value / Tick Size + Exchange Fee + Technology Fee) * 2 contracts

= ((1,851 - 1,750) * 2.5 / 1 + 1 + 0.99) * 2 contracts

= $508.98

Your USD Fiat Wallet will be debited of this amount.

Example 2 - You open a short position:

ETH’s price is $1,850 and the contract you would like to sell has a Target of $1,750 and Stop of $2,000 with Tick Size 1 and Tick Value 2.5. Your Slippage Tolerance is set at $5 per contract and you sell 2 contracts.

The Indicative Amount you need to pay before confirming your order will be:

((Difference between the Stop Level and Current Price) * Tick Value / Tick Size + Slippage Tolerance + Exchange Fee + Technology Fee) * 2 contracts

= ((2,000 - 1,850) * 2.5 / 1 + 5 + 1 + 0.99) * 2 contracts

= $763.98

A hold will be put on your USD Fiat Wallet for this amount.

Your order was filled at $1,849.

The actual amount you paid to open 2 short positions is:

((Difference between the Stop Level and Trade Price) * Tick Value / Tick Size + Exchange Fee + Technology Fee) * 2 contracts

= ((2,000 - 1,849) * 2.5 / 1 + 1 + 0.99) * 2 contracts

= $758.98

Your USD Fiat Wallet will be debited of this amount.

How do I calculate the amount I’ll receive when I close a position?

When a position is closed, your USD Fiat Wallet will be credited the difference between the Trade Price and Stop Level of the contract, taking into account the Tick Size and Tick Value of the contract, after deducting fees.

Example 1 - You have a long position:

You bought 2 contracts with a Target of $2,000 and Stop of $1,750 with Tick Size 1 and Tick Value 2.5.

The contract expires

At contract expiry, ETH’s price is $1,900.

You will be credited:

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((1,900 - 1,750) * 2.5 / 1 - 1 - 0.99) * 2 contracts)

= $728.02

The position is knocked out at Max Profit (Target)

You will be credited:

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((2,000 - 1,750) * 2.5 / 1 - 1 - 0.99) * 2 contracts)

= $1,246.02

In this case, the Trade Price will be the Target Price of the contract.

The position is knocked out at Max Loss (Stop)

You will not be credited nor debited any amount. Your maximum loss is the cost you put into the trade.

You proactively close your position

You close your position when ETH’s price is $1,900.

You will be credited:

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((1,900 - 1,750) * 2.5 / 1 - 1 - 0.99) * 2 contracts)

= $728.02

Example 2 - You have a short position:

You sold 2 contracts with a Target of $1,750 and Stop of $2,000 with Tick Size 1 and Tick Value 2.5.

The contract expires

At contract expiry, ETH’s price is $1,890.

You will be credited:

MAX (0, ((Difference between Stop Level and Trade Price) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((2,000 - 1,890) * 2.5 / 1 - 1 - 0.99) * 2 contracts)

= $546.02

The position is knocked out at Max Profit (Target)

You will be credited:

MAX (0, ((Difference between Stop Level and Trade Price) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((2,000 - 1,750) * 2.5 / 1 - 1 - 0.99) * 2 contracts)

= $1,246.02

In this case, the Trade Price will be the Target Price of the contract.

The position is knocked out at Max Loss (Stop)

You will not be credited nor debited any amount. Your maximum loss is the cost you put into the trade.

You proactively close your position

You close your position when ETH’s price is $1,890.

You will be credited:

MAX (0, ((Difference between Stop Level and Trade Price) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((2,000 - 1,890) * 2.5 / 1 - 1 - 0.99) * 2 contracts)

= $546.02

Profit/Loss Computation

Your Profit/Loss is calculated for each contract instrument.

Unrealized Profit/Loss

You will have Unrealized Profit/Loss if you have an open position. It will be updated as the current Trade Price moves and is calculated by comparing the current Trade Price of the underlying asset and the average Entry Price for your open positions, taking into account the Tick Size and Tick Value of the contract. This calculation excludes fees.

Example 1:

You have an ETH long position with 2 contracts

  • You opened the position by buying 1 contract at $1,820 and 1 contract at $1,860

  • The Average Entry Price of the 2 contracts is $1,840

  • The contracts have Tick Size 1 and Tick Value 2.5

The Unrealized P&L excludes the fees charged for opening the position.

Unrealized P&L = ((Difference between Current Price and Average Entry Price) * Tick Value / Tick Size) * No. of contracts in the open position

When the current price is $1,800, your Unrealized P&L is -$200.

((1,800 - 1,840) * 2.5 / 1) * 2 contracts = -200

When the current price moves to $1,860, your Unrealized P&L will be $100.

((1,860 - 1,840) * 2.5 / 1) * 2 contracts = 100

Example 2:

You have an ETH short position with 2 contracts

  • You opened the position by selling 1 contract at $1,850 and 1 contract at $1,880

  • The average Entry Price of the 2 contracts is $1,865

  • The contracts have Tick Size 1 and Tick Value 2.5

The Unrealized P&L excludes the fees charged for opening the position.

Unrealized P&L = ((Difference between Average Entry Price and Current Price) * Tick Value / Tick Size) * No. of contracts in the open position

When the current price is $1,900, your Unrealized P&L is -$175.

((1,865 - 1,900) * 2.5 / 1) * 2 contracts = -175

When the current price moves to $1,840, your Unrealized P&L will be $125.

((1,865 - 1,840) * 2.5 / 1) * 2 contracts = 125

Realized Profit/Loss

You will have Realized Profit/Loss if you have closed a position. It is calculated by comparing the Trade Price of the underlying asset when the position is closed and the average Entry Price for the positions that were closed, taking into account the Tick Size and Tick Value of the contract. This calculation includes fees.

Example 1:

You have an ETH long position with 2 contracts

  • ETH contract: Target $2,000, Stop $1,750

  • The Average Entry Price of the 2 contracts is $1,840

  • The contracts have Tick Size 1 and Tick Value 2.5

  • Refer to the Applicable Fees section

When you opened the long position, you were debited $453.98

((Difference between the Trade Price and Stop Level) * Tick Value / Tick Size + Exchange Fee + Technology Fee) * 2 contracts

= ((1,840 - 1,750) * 2.5 / 1 + 1 + 0.99) * 2 contracts

= 453.98

a)

When you closed the position by selling 2 contracts at $1,850, you were credited $496.02

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((1,850 - 1,750) * 2.5 / 1 - 1 - 0.99) * 2)

= 496.02

Your Realized P&L is $42.04

Amount credited when the position is closed/ expired/ knocked out less the amount debited when the position was opened

= 496.02 - 453.98

= 42.04

b)

When you closed the position by selling 2 contracts at $1,830, you were credited $496.02

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((1,830 - 1,750) * 2.5 / 1 - 1 - 0.99) * 2)

= 396.02

Your Realized P&L is -$57.96

Amount credited when the position is closed/ expired/ knocked out less the amount debited when the position was opened

= 396.02 - 453.98

= -57.96

Example 2:

You have an ETH short position with 2 contracts

  • ETH contract: Target $1,750, Stop $2,000

  • The Average Entry Price of the 2 contracts is $1,840

  • The contracts have Tick Size 1 and Tick Value 2.5

  • Refer to the Applicable Fees section

When you opened the short position, you were debited $803.98

((Difference between the Trade Price and Stop Level) * Tick Value / Tick Size + Exchange Fee + Technology Fee) * 2 contracts

= ((2,000 - 1,840) * 2.5 / 1 + 1 + 0.99) * 2 contracts

= 803.98

a)

When you closed the position by buying 2 contracts at $1,850, you were credited $746.02

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((2,000 - 1,850) * 2.5 / 1 - 1 - 0.99) * 2)

= 746.02

Your Realized P&L is -$57.96

Amount credited when the position is closed/ expired/ knocked out less the amount debited when the position was opened

= 746.02 - 803.98

= -57.96

b)

When you closed the position by buying 2 contracts at $1,830, you were credited $846.02

MAX (0, ((Difference between Trade Price and Stop Level) * Tick Value / Tick Size - Exchange Fee - Technology Fee) * 2 contracts)

= MAX (0, ((2,000 - 1,830) * 2.5 / 1 - 1 - 0.99) * 2)

= 846.02

Your Realized P&L is $42.04

Amount credited when the position is closed/ expired/ knocked out less the amount debited when the position was opened

= 846.02 - 803.98

= 42.04

Applicable Fees

The following fees are charged for each contract of a trade:

  • $1.00 Exchange Fee

  • $0.99 Technology Fee

How are the fees charged?

When you open a position

When you open a position, the fees are added to your trade amount and debited from your USD Fiat Wallet (See How do I calculate the amount to pay to enter into a trade?).

If you open a long position by buying 2 contracts, you will pay ($1 + $0.99)*2 = $3.98.

This also applies if you open a short position by selling 2 contracts. You will also pay $3.98.

When your position is closed

When a position is closed, the fees are deducted before crediting your USD Fiat Wallet (See How do I calculate the amount I receive when I close a position?).

Your maximum loss is the amount you put into the trade when opening a position. If your position is closed at the Stop Level, or close to the Stop Level such that the full fee cannot be deducted, you will not receive credit but you will also not be further debited for fees.

If you close a long position by selling 2 contracts, you will incur fees of ($1 + $0.99)*2 = $3.98.

This also applies if you close a short position by buying 2 contracts. You will also incur $3.98 in fees.

Example:

BTC’s price is $20,000, and the contract you would like to buy has a Target of $20,400 and a Stop of $19,900.

Assuming the order is filled at $20,000, you will pay the difference:

  • When you open a position, the fee is added to the amount before debiting the balance from your Fiat Wallet:

    • Debited Amount = (Current Price - Stop Level) + Exchange Fee + Technology Fee

  • When you close a position, the fee is deducted before crediting the balance from your Fiat Wallet:

    • If the user closes a position of 1 contract at a profit

      • Credited amount = Initial outlay for opening the position + Profit - Exchange Fee ($1) - Technology Fee ($0.99)

    • If the user closes a position of 1 contract at a loss, the amount of fees incurred is impacted by the closing price

      • If the closing price is >=$1.99 away from the Stop Level

        • Credited amount = Initial outlay for opening the position - Loss - Exchange Fee ($1) - Technology Fee ($0.99)

      • If the closing price is <$1.99 away from the Stop Level

        • You will not be credited any amount

        • The Exchange Fee takes precedence over the Technology Fee

        • If the closing price is $1.20 away from the Stop Level, the Exchange Fee is $1 and the Technology Fee is $0.20

        • If closing price is $0.20 away from Stop Level, the Exchange Fee is $0.20 and the Technology Fee is $0

      • If the position is knocked out at the Stop Level (Max Loss), no fees are incurred

Where is this feature available?

This feature is currently available in the United States.


Glossary

Term

Definition

Range

The range is the difference between the Target and Stop price of an UpDown Options contract. The contract value will move along with the price movement in the underlying market within the range and be knocked out if either the Target or Stop is reached.

Tick size

The tick size is the smallest increment a price can move in any market.

Example:

If BTC UpDown Options has a tick size of 1, and is currently $20,000, the next price increase will be $20,001.

Tick value

The tick value is the value (in USD) of a tick size of the UpDown Options contract.

The ratio of tick value / tick size corresponds to the unit of underlying assets in one unit of derivative product.

Example:

If BTC UpDown Options has a tick size of 1 and tick value of 1, for every $1 move in the price of BTC, the BTC UpDowns contract value will move by $1.

If ETH UpDown Options has a tick size of 1 and tick value of 2.50, for every $1 move in the price of ETH, the ETH UpDowns contract value will move by $2.50.



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