How to choose an option strike price and expiry on Bybit

Options contracts are defined by several parameters, including the underlying asset, option type, strike price, expiry and premium. Contracts on the same asset can have different strikes, expiries and prices, so understanding these parameters helps you compare them before selecting a contract. This guide focuses on choosing a strike price and expiry, then checking the premium, breakeven and risk before placing an order on Bybit.

Key Takeaways:

• The strike price affects how far the underlying must move for the option to become profitable.

• The expiry sets how long the price scenario has to develop.

• Premium cost and position risk should be checked alongside both choices.

Key option parameters: strike price and expiry

Before comparing contracts, it helps to know the core parameters:

• Underlying asset: the asset the option tracks (e.g. BTC or ETH).

• Option type: a call gives the buyer upside exposure; a put gives downside exposure or protection.

• Strike price: the price level that determines the contract's payoff at expiration.

• Expiry: the date and time the contract settles.

• Premium: the price paid by the buyer (and received by the seller) to enter the contract.

Strike price and expiry are two of the main parameters used to distinguish one options contract from another. Together with the underlying asset and option type, they identify the contract you are comparing. Bybit's current crypto Options are European-style and cash-settled in USDT, so exercise does not involve physical delivery of the underlying asset.

Choose a strike price for your scenario

Start with a price scenario and a risk limit, then compare strikes relative to the current underlying price.

Consider a hypothetical example with the underlying at $100. Two call options share the same expiry but have different strikes:

Call B costs less upfront because its strike is further from the current price. However, the underlying must reach $114 for Call B to break even, compared with $108 for Call A. A lower premium means a smaller maximum loss, but it also requires a larger move to become profitable.

Neither contract is objectively better. The choice depends on how far you expect the price to move, how much premium you are willing to risk and the timeframe you have in mind. The same logic applies to puts: a put with a strike closer to the current price costs more but requires a smaller downward move to break even (put breakeven = strike minus premium).

Match the expiry to your timeframe

Choose an expiry that covers the period in which your price scenario might develop.

For otherwise comparable options, a longer expiry generally carries a higher premium, all else equal. This is because more time gives the underlying more opportunity to move. However, implied volatility and other market inputs can also change the quote, so a longer expiry does not always mean a proportionally higher price.

A shorter expiry leaves less time for the move to occur. If the price has not moved enough by expiration, the option may expire worthless and the buyer loses the premium paid.

When selecting an expiry, balance the time you need against the additional premium cost. The goal is to give the scenario enough time to develop without overpaying for time you may not need. Keep in mind that an option’s time value generally declines as expiry approaches, all else equal.

Compare contracts in the Bybit Options Chain

On the Bybit App:

1. Go to Trade → Options and switch to Pro.

2. Select the Options trading pair (e.g. BTCUSDT - Options) you want to view.

3. Choose an expiry from the available dates.

4. Select All Types, Call or Put, depending on the contracts you want to compare.

5. Compare the available strike prices and bid/ask quotes. In All Types, calls and puts appear on either side of the strike prices.

On the web: Go to Trade → Options, select your preferred Options trading pair and expiry, then compare strikes in the centre column. Calls appear on the left and puts on the right.

The bid and ask are the current market quotes for the option premium. If you’re buying, the ask is the relevant offer price; if you’re selling, the bid is the relevant buying price. Your actual premium depends on the execution price and quantity, with fees added separately. For the full order-placement walkthrough, see How to trade crypto options on Bybit.

Check the four payoffs at expiration

Before selecting a contract, review the payoff profile for the position type you're considering. The table shows the maximum gain and loss per underlying unit, after premium and before fees. Your total payoff scales with the quantity traded.

Long positions (buying calls or puts) have a defined maximum loss equal to the premium paid. Short positions (selling calls or puts) can produce losses that exceed the premium received.

These limits apply at expiration. Before then, the position's value can change due to price movements, time decay, implied volatility and liquidity conditions.

Check risk before choosing a contract

Several factors affect the actual cost and risk of a contract beyond the premium:

• Bid-ask spread. A wider spread increases the cost of entering and exiting a position. Check the spread in the Options Chain before placing an order.

• Fees. Trading fees apply to executed orders, while applicable delivery fees may also apply at expiration. Check the latest Bybit fee guidance and contract details rather than relying on fixed figures.

• Full premium loss. When buying, you can lose the entire premium if the option expires out of the money.

• Margin and liquidation. When selling, you must maintain margin. If the market moves against you, your position may be liquidated before expiry.

Choosing the right contract

Strike, expiry, premium, breakeven and risk form a connected set of decisions. Start with a price scenario, select a strike that fits, choose an expiry that gives the scenario enough time, then verify that the premium, breakeven and payoff profile match your risk tolerance.

To explore available contracts, open the Bybit Options Chain and compare strikes and expiries before considering an order.

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