InvestHL Archives

Dec

2025

A man consults his smartphone while working on a computer.

What Is Spoofing in Trading? How It Works and Its Consequences

By Samuel Becker | Growing Wealth, invest, Investing, Terminology | Comments Off

Table of Contents

What Is Spoofing?
What’s the Point of Spoofing?
Is Spoofing Illegal?
Example of Spoofing
Consequences of Spoofing
How to Protect Against Spoofing
FAQ

In the financial space, the term “spoofing” refers to an illegal form of stock market and exchange trickery that is often used to change asset prices. Given that the stock markets are a wild place, and everyone is trying to gain an advantage, spoofing is one way in which some traders bend the rules to try and gain an advantage.

Spoofing is also something that traders and investors should be aware of. This tactic is sometimes used to change asset prices – whether stocks, bonds, or other types of assets.

Key Points

• Spoofing is an illegal trading tactic where traders place and cancel orders to manipulate asset prices, influencing market supply and demand dynamics.

• Traders often use algorithms to execute high volumes of fake orders, creating a false perception of demand that can inflate or deflate security prices.

• The practice of spoofing is a criminal offense in the U.S., established under the Dodd-Frank Act, with serious penalties for those caught engaging in it.

• Significant fines have been imposed on both institutions and individual traders for spoofing, highlighting the risks of detection and legal consequences.

• Investors should remain vigilant against spoofing, as it can distort market activity and impact trading strategies, particularly for active traders and day traders.

What Is Spoofing?

Spoofing is when traders place market orders — either buying or selling securities — and then cancel them before the order is ever fulfilled. In a sense, it’s the practice of initiating fake orders, with no intention of ever seeing them executed.

Spoofing means that someone or something is effectively spamming the markets with orders, in an attempt to move security prices.

What’s the Point of Spoofing?

Because stock market prices are determined by supply and demand — for instance, the more demand there is for Stock A, the higher Stock A’s price is likely to go, and vice versa — they can be manipulated to gain an advantage. That’s where spoofing comes in.

By using bots or an algorithm to make a high number of trades and then cancel them before they go through, it’s possible for spoofers to manipulate security prices. For a trader looking to buy or sell a certain security, those valuations may be moved enough to increase the profitability of a trade.

Spamming the markets with orders creates the illusion that demand for a security is either up or down, which is then reflected in the security’s price. Because it would require an awful lot of “spoofed” orders to move valuations, spoofers might rely on an algorithm to place and cancel orders for them, rather than handle it manually. For that reason, spoofing is typically associated with high-frequency trading (HFT).

Is Spoofing Illegal?

If it sounds like spoofing is essentially cheating the system, that’s because it is. In the United States, spoofing is illegal, and is a criminal offense. Spoofing was made illegal as a part of the Dodd-Frank Act, which was signed into law in 2010. Specifically, spoofing is described as a “disruptive practice” in the legislation, straight from the U.S. Commodity Futures Trading Commission (CFTC), which is the independent agency responsible for overseeing and policing spoofing on the markets:

Dodd-Frank section 747 amends section 4c(a) of the CEA to make it unlawful for any person to engage in any trading, practice, or conduct on or subject to the rules of a registered entity that —

(A) violates bids or offers;

(B) demonstrates intentional or reckless disregard for the orderly execution of transactions during the closing period; or

(C) is, is of the character of, or is commonly known to the trade as ‘spoofing’ (bidding or offering with the intent to cancel the bid or offer before execution).

Additionally, there are laws and rules related to spoofing under rules from the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA), too.

Example of Spoofing

A hypothetical spoofing scenario isn’t too difficult to dream up. For instance, let’s say Mike, a trader, has 100,000 shares of Firm Y stock, and he wants to sell it. Mike uses an algorithm to place hundreds of “buy” orders for Firm Y shares — an algorithm that will also cancel those orders before they’re executed, so that no money is actually spent.

The influx of orders is read by the market as an increase in demand for Firm Y stock, and the price starts to increase. Mike then sells his 100,000 shares at an inflated price — an artificially inflated price, since Mike effectively manipulated the market to increase his profits.

Consequences of Spoofing

Because spoofing is a relatively easy way to manipulate markets and potentially increase profits, it’s also a fairly common practice for some traders and firms, despite being against the law. That transgression can cost spoofers if and when they’re caught.

For example, one financial institution was fined nearly $1 billion by the SEC during the fall of 2020 after the company was caught conducting spoofing activity in the precious metals market.

But it’s not just the big players that can be on the receiving end of a smack down by the authorities. During August of 2020, an individual day trader was caught manipulating the markets through spoofing activity — actions that netted the trader roughly $140,000 in profits. The trader was ultimately ordered by the CFTC to pay a fine of more than $200,000.

Despite the cases that make headlines, it’s generally hard to identify and catch spoofers. With so many orders being placed and executed at once (especially with algorithmic or computer aid) it’s difficult to identify fake market orders in real time.

How to Protect Against Spoofing

There are a number of parties that are constantly and consistently trying to gain an edge in the markets, be it through spoofing or other means. For investors, it’s worth keeping that in mind while sticking to an investing strategy that works for you, rather than investing with your emotions or getting caught up in the news cycle.

In a time when a single social media post or errant comment on TV can send stock prices soaring or into the gutter, it’s critical for investors to understand what’s driving market activity.

Test your understanding of what you just read.

The Takeaway

Spoofing is meant to gain advantage in the markets, but as such it’s illegal and penalties can be steep. Beyond the spoofers trying to manipulate the market, spoofing has the potential to affect all investors.

If spoofers are manipulating prices for their own gain, that can cause traders and investors to react, not realizing what is going on behind the scenes. While this is more of an issue for active investors or day traders, it’s something to be aware of.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What does spoofing mean in the stock market?

In the financial space, the term “spoofing” refers to an illegal form of stock market and exchange trickery that may be used to alter asset prices. Spoofing is one way in which some traders bend the rules to try and gain an advantage.

Is spoofing legal?

In the United States, spoofing is illegal, and is a criminal offense. Spoofing was made illegal as a part of the Dodd-Frank Act in 2010, and is policed by the Commodity Futures Trading Commission (CFTC).

How can you protect yourself from spoofing?

There’s no foolproof way to protect yourself and your portfolio from spoofing, so it may be best to stick to your investing strategy and try not to get caught up in market hype. Further, you can keep an eye out for unusual market movements, use limit orders, and even reporting suspicious activity to the SEC.

Photo credit: iStock/visualspace

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q425-071

Dec

2025

A lone black swan among several white swans arranged in neat rows.

Black Swan Events and Investing, Explained

By Melanie Mannarino | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is a Black Swan Event?
Examples of Black Swan Events
Why Do Black Swan Events Happen?
Can You Predict a Black Swan Event?
FAQ

The term “black swan event” is widely used in finance today to describe an unanticipated event that severely impacts the financial markets. The name stems from the discovery of avian black swans by Dutch explorer De Vlamingh while exploring Australia in the late 1600s. Historians credit de Vlamingh with separating the “expected” (i.e., a white swan, which were plentiful) with the “unexpected” (i.e., a black swan, which was a rare sighting).

Writer, professor and former Wall Street trader Nassim Nicholas Taleb popularized the financial theory of “black swan” events in his 2007 book The Black Swan: The Impact of the Highly Improbable. Taleb described the occasional, but highly problematic, arrival of black swans on the investment landscape, and outlined what, in his opinion, economists and investors could do to better understand those events and protect assets when they occur.

Key Points

• Black swan events are extremely rare, unpredictable occurrences with severe consequences that become obvious only in hindsight, a concept popularized by Nassim Nicholas Taleb in his 2007 book.

• Historical black swan events include the Soviet Union’s collapse, 9/11 terrorist attacks, the dot-com bubble burst, and the 2008-2009 financial crisis, each causing catastrophic economic damage.

• Black swan events are identified by three characteristics: extreme rarity with no prior similar events, severe widespread impact on economies and societies, and retrospective recognition of preventability.

• Predicting specific black swan events is virtually impossible due to complex interactions among political, financial, environmental, and social factors that create unpredictable chains of consequences.

• Preparing for black swan events requires portfolio diversification, avoiding panic-driven market timing, maintaining conservative investment strategies, and potentially capitalizing on opportunities during market downturns through dollar-cost averaging.

What Is a Black Swan Event?

According to Taleb, a black swan event is identifiable due to its extreme rarity and to its catastrophic potential damage to life and health, and to economies and markets. Taleb also notes in the book that once a black swan landed and devastated everything in its path, it was obvious in hindsight to recognize the event occurred.

This is how Taleb describes a black swan event in his book: “A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences,” Taleb wrote in his book. “Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight.”

It can be a difficult concept for investors. Who, after all, throughout the history of the stock market, would leave their finances unprotected from a black swan onslaught if they knew the event was imminent?

By definition, predicting the arrival of a black swan is largely outside the realm of probability. All anyone needs to know, Taleb maintains, is that black swans occur and investors should not be surprised when they do happen.

Taleb outlines three indicators that signal the arrival of a black swan event. Each is meaningful in truly understanding a black swan scenario.

1. Black swan events are outliers. No similar and prior event could predict the arrival of a particular black swan.

2. Black swan events are severe, and typically inflict widespread damage. That damage also has a severe impact on economies, cultures, institutions, and on families and communities.

3. They’re usually recognized in hindsight. When black swans occur and eventually dissipate, recriminations take its place. While the specific black swan event wasn’t predicted, observers say the event could have and should have been prevented.

💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.

Examples of Black Swan Events

It’s become common for politicians and investors to call any negative event a “black swan” event, whether or not it meets Taleb’s definition. However, history has no shortage of true black swan events, which led to large, unpredictable market corrections.

The following events are considered some of the most infamous among economists and historians.

The Soviet Union’s Historic Collapse

Economists consider the collapse of the Soviet Union in 1991 a major black swan. Only 10 years earlier, the Russian empire was considered a major global economic and military threat. A decade later, the Soviet Union was no more, significantly shifting the global geopolitical and economic stage.

The 9/11 Terrorist Attacks

In hindsight, the United States might have seen the attacks on the World Trade Center in New York City and the Pentagon in Washington, D.C. coming. International terrorism had long been a big risk management issue for the U.S. government, but the severity of the attack left the world stunned — and plunged the U.S. into a serious economic decline. Stocks lost $1.4 trillion in value the week after the attacks.

The Dot-com Bubble

In the late 1990s, investors were indulging in irrational exuberance and nowhere was that more clear than with the nation’s stock market — particularly with white-hot technology stocks. With an army of Internet stocks in the IPO pipeline, overvalued tech stocks plummeted, taking the entire stock market down in the process. The damage was staggering, with the Nasdaq Index losing 78% of its value between March 2000 and October 2002.

The 2008-2009 Financial Crisis

After a series of high-risk derivative bets by major banks, mounting losses in the U.S. mortgage market, and the collapse of Lehman Brothers, the U.S. economy teetered on the edge of disaster — a scenario it would take almost a decade to correct. The unemployment rate doubled to more than 10%, domestic product declined 4.3%, and at its worst point, the S&P 500 plummeted 57%, creating a bear market.

It’s worth noting that although some people have referred to the Covid-19 pandemic as a black swan event, Taleb does not consider it to be one since he feels there was enough historical precedence to foresee it.

Why Do Black Swan Events Happen?

Since black swan events are virtually impossible to predict, there is no concrete answer as to why they happen. The world is complicated, with many different factors — political, financial, environmental, and social, among others — impacting one another and setting off chains of events that could potentially become black swan events in scope and magnitude.

Can You Predict a Black Swan Event?

By its very definition, it’s nearly impossible to predict a specific black swan event. This makes it hard to prepare for black swans as you would for other investment risks.

Instead, investors may want to focus on making sure they’re prepared, generally, for the unknown. Here’s how to help do that:

• Try to develop a pragmatic mindset. Investors are better off knowing unanticipated negative events do exist and could arrive on their doorstep at any time. Keep in mind the possibility of black swans and consider building an expectation of stock volatility into your overall portfolio-management strategy.

• Try to avoid getting bogged down by long-term forecasts. Relying solely on expert predictions or far-off investment outlooks can be overwhelming, since unexpected events, including black swans can happen at any time and it’s normal for markets to fluctuate. Instead, some investors consider building a more conservative element into their investment portfolio, one that relies more on protecting assets, helping curb a potential desire to make rash moves during a black swan event. Have a candid conversation with your financial advisor, or educate yourself if you don’t have a financial advisor, about how proper diversification may help build a portfolio that balances the need for performance with the need for protection.

• Don’t panic when a black swan event happens. As tempting as it might be to try to get out of a market during a black swan event and get back in when it fades away, resist the urge to engage in market timing.

• Many investors try looking for opportunities. Putting money into the markets during a black swan event can be difficult and potentially risky, but investing in a down market may yield positive returns over the long-term.

Rather than trying to time the market, some investors may consider using a dollar-cost averaging strategy, when making regular purchases — even during a black swan event.

The Takeaway

For long-term investors, the prudent stance on black swan events is to acknowledge their existence, build some protection into your investment portfolio to help mitigate potential damage, and be ready to take full advantage of a market upturn once the black swan flies away.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What is a black swan event in recent years?

One of the most recent black swan events was the 2008-2009 financial crisis known as the Great Recession. That’s when a series of high-risk derivative bets by major banks, mounting losses in the U.S. mortgage market, and the collapse of Lehman Brothers, the biggest U.S. bankruptcy ever, pushed the U.S. economy to the edge of disaster.

What was the biggest black swan event?

The Great Depression of 1929 was probably the most infamous black swan event. It started with the U.S. stock market crash in October 1929 and led to a worldwide drop in stock prices. The U.S. economy shrank by 36% between 1929 and 1933, many banks failed, and the U.S. unemployment rate skyrocketed to more than 25%. It was the longest and most severe economic recession in modern history.

What are the attributes that identify a black swan event?

According to Nassim Nicholas Taleb, who popularized the black swan theory, the attributes that identify a black swan event are: 1) black swan events are rare and no similar or prior event could predict them, 2) black swan events are severe and inflict widespread damage, and 3) after the fact, observers say the black swan event could have and should have been prevented.

Photo credit: iStock/by Martin Nancekievill

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SOIN-Q425-064

Dec

2025

A person in a purple shirt holds a purple smartphone, looking at the screen, with a coffee cup in the background.

Crypto Staking: A Beginner’s Guide to Earning Passive Income With Crypto

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is Crypto Staking?
How Does Crypto Staking Work?
How to Start Crypto Staking
What Are the Different Ways to Stake Crypto?
The Pros and Cons of Crypto Staking
How to Choose the Best Coins for Staking in 2025
Is Crypto Staking Worth It?
FAQ

Crypto staking is a way to use crypto holdings to generate rewards while helping to validate transactions. While “staking” may be a relatively new addition to the financial lexicon, it’s important for those interested in crypto to understand what it is, how it works, and what cryptocurrencies it can be used to obtain.

Crypto staking may feel like it’s a step beyond simply learning how to buy cryptocurrencies or how a crypto exchange works, but learning about cryptocurrency staking can broaden your knowledge of the crypto ecosystem, making you more informed about your options.

Key Points

• Crypto staking involves pledging crypto holdings to a blockchain network to earn rewards, while supporting transaction validation on the blockchain.

• Staking is more energy-efficient and accessible compared to mining.

• Popular staking coins include Ethereum, EOS, Tezos, and Polkadot.

• Staking yields can range from approximately 0.40% to 18% annually.^[1]

• Crypto staking can be high risk given the high volatility of crypto assets and potential network security concerns.

🛈 While SoFi members may be able to buy, sell, and hold a selection of cryptocurrencies, such as Bitcoin, Solana, and Ethereum, other cryptocurrencies mentioned may not be offered by SoFi.

What Is Crypto Staking?

Crypto staking is the process of “locking up” crypto holdings on a blockchain network in order to try and obtain rewards. There may be time limits or requirements depending on the specific blockchain network, and rewards can vary significantly, but are typically a percentage of the coins staked.

Cryptocurrencies are built with blockchain technology, in which crypto transactions are verified, and the resulting data is stored on the blockchain. Depending on the types of cryptocurrency you’re working with and its supporting technologies, these validation processes may involve staking, using a “proof-of-stake” consensus mechanism, or mining, using a “proof-of-work” consensus mechanism. Each of these processes help crypto networks achieve consensus, or confirmation that all of the transaction data adds up to what it should.

Staking vs Mining: What’s the Difference?

Staking crypto generates rewards and helps a crypto network validate information on the blockchain, using the cryptocurrency stakers locked up on the network. Crypto mining has the same goal, but the consensus needed to verify transactions is achieved in a different way.^[2]

Effectively, mining involves using computing power to solve mathematical problems and equations to open up new blocks on a blockchain, for which miners are then rewarded. Mining requires significantly more computing power and resources, but effectively, both staking and mining are trying to achieve the same ends of validating information and producing new “blocks.”

The Role of Proof of Stake (PoS)

Achieving consensus and validating information on a blockchain requires participants. That’s what staking is: individuals who actively hold onto, or lock up their crypto holdings in their crypto wallet, may participate in these networks’ consensus-taking processes. Stakers are, in essence, approving and verifying transactions on the blockchain.

For doing so, the networks reward those individuals. The specific rewards will depend on the network.

It may be helpful to think of crypto staking as similar to depositing cash in a savings account. The depositor earns interest on their money while it’s in the bank, as a reward from the bank, who uses the money for other purposes (lending, etc.). Staking coins is, from that perspective, similar to earning interest. Although cryptocurrency holdings could potentially lose value as the market ebbs and flows, too.

How Does Crypto Staking Work?

Infographic on How Crypto Staking Works

Crypto staking is typically a passive activity, unless you actively run a blockchain validator node. When someone stakes their holdings (typically by locking them in a wallet through a crypto staking platform), the network can use those holdings to forge new blocks on the blockchain.

The more crypto you’re staking, the better the odds are that your holdings will be selected to validate information and new blocks, and a lot of that depends on the specific blockchain network you’re staking on.

Essentially, during a transaction, information is “written” into the new block, and the staker’s holdings are used to validate it. Since coins already have “baked in” data from the blockchain, they can be used as validators. Then, for allowing those holdings to be used as validators, the network rewards the staker.

How to Start Crypto Staking

To start crypto staking, a person needs to decide where and what they want to stake. Here are four simple steps to get started.

1. Choosing a Proof-of-Stake Cryptocurrency

To begin staking cryptocurrency independently, a user would have to decide which coin they want to stake and buy their cryptocurrency of choice.

Ethereum (ETH), for example, requires a minimum of 32 ETH (worth about $123,000 at the time of writing) for users to begin staking.^[3]

2. Choosing a Staking Platform

You may be able to stake crypto through an exchange network, through a staking service, or directly through the cryptocurrency itself.

3. Choosing Your Wallet and Hardware

Typically, after choosing a platform, you would then download a crypto wallet in which to store your coins for staking. That may mean going directly to the specific crypto’s main website and downloading its corresponding wallet.

To stake crypto, users need a constant, uninterrupted internet connection. A standard dedicated desktop computer will likely do the job, although a Raspberry Pi might save on electrical costs.

4. Begin Staking

Once the hardware has been selected and the crypto wallet software downloaded, a user can begin staking cryptocurrency.

For those holding the appropriate crypto in an exchange-hosted crypto wallet, the exchange typically handles all the staking on the backend.

Depending on the specific crypto, wallet, or exchange network, that may be all the action a person needs to take. But it’s a good idea to double-check to see if additional steps need to be taken.

What Are the Different Ways to Stake Crypto?

There are also a few different ways to stake crypto.

Staking on an Exchange

Perhaps one of the simplest ways to stake crypto is to do so through your given exchange. Many crypto exchanges give people the option to stake, and in those cases, depending on the exchange, they may simply need to select the option to stake, lock up their holdings, and let the rewards generate.

Delegated Staking and Staking Pools

Aside from an exchange, stakers may be able to delegate their crypto holdings to pools, which will allow them to generate rewards, too. This can’t be done for every cryptocurrency, but for those that do have delegated staking and pooling built into their networks, it can be a way to stake directly to a validator or delegate.

Running Your Own Validator Node

If you’re really feeling up for it and want to get more deeply involved on a specific blockchain network, you could look at running your own validator node, also referred to as solo staking. Note, however, that doing so likely requires some significant background knowledge, and there’s the potential of making mistakes. It could also require some hardware that could cost hundreds or thousands of dollars.

The Pros and Cons of Crypto Staking

There are some pros and cons to staking crypto.

Crypto Staking Advantages	Crypto Staking Disadvantages
Low energy usage	Different security measures
Easier to earn rewards	Potential for takeover
No special hardware needed	Increased centralization

The Benefits of Staking

Here are a few of the potential benefits of staking:

• Less energy-intensive. PoS networks use less energy than PoW platforms. Each mining machine requires a constant supply of electricity and consumes much more power than a regular computer. But it’s possible to run validator nodes on an average computer, eating up fewer resources, to power your staking activity

• Easier to earn rewards. Crypto staking and mining rewards can be very different. Almost anyone can stake a small amount of crypto on a crypto exchange and earn some kind of yield. To become a miner, however, often requires a much bigger commitment. First, you’d need to acquire the proper computer, which can be costly; then you’d need to learn to use it, which can be time-consuming.

• No special equipment required. Anyone can become a validator using a regular computer, assuming they have enough money and can keep the node running constantly. By contrast, mining requires specialized hardware.

The Risks of Staking

Conversely, there are some risks of staking that individuals should know about.

• Different security measures. PoS is relatively new compared to PoW. It’s not necessarily unsafe, but it’s also not inherently more secure than PoW, either. There are different security measures in place, and a lot of that depends on the specific network as well.

• Potential for takeover. Crypto blockchain networks may be controlled by those who hold the majority (or 51%) of tokens. While attacking a PoW network would involve acquiring large amounts of computing power, in many cases, attacking a PoS network could only require funding (again, depending on the specific network). Smaller blockchain networks are generally more vulnerable to a PoS “51% attack,” where attackers may try to manipulate transactions to their own advantage. However, PoS networks may also provide some inherent protection against these attacks. For example, attackers attempting such an attack risk losing the entire amount that’s staked.

• Increased centralization. The creator(s) of blockchain technology intended for blockchains to be decentralized. But in some cases, PoS networks can wind up becoming more centralized because becoming a validator can be more expensive than becoming a miner. Ethereum (ETH), for example, plans to change from PoW to PoS. To become an ETH validator would require 32 ETH (or around $123,000 as of summer 2025). Many centralized exchanges have chosen to become validators of PoS coins to share staking rewards with their customers.

How to Choose the Best Coins for Staking in 2025

Just a few years ago, the entire concept of proof-of-stake consensus was still relatively new, and options for staking coins were few and far between. But a growing number of projects are utilizing PoS and some exchanges are making it easier than ever for users to passively earn crypto by staking their coins.

With that in mind, the list of potential cryptos to stake, and the ones offering the highest potential yields, is always changing. But here are some of the cryptos out there that are viewed as more established.

• Ethereum (ETH): Ethereum (ETH) is one of the most popular cryptocurrencies on the market — although it is not exactly a cryptocurrency itself. Staking Ethereum on your own will require a minimum of 32 ETH. Rewards vary, too.

• EOS (EOS): EOS is similar to Ethereum in that it’s used to support decentralized blockchain systems and projects. EOS tokens are native to the EOS blockchain, and like other cryptos, can be staked to earn rewards.

• Tezos (XTZ): Like EOS and Ethereum, Tezos (XTZ) is an open-source blockchain network with its own native currency, with a symbol of XTZ. And it, too, can be staked on certain platforms and networks.

• Polkadot (DOT): Polkadot is a newer cryptocurrency, created in August 2020. Polkadot is both a cryptocurrency and a protocol designed to support “parachains,” which allow different blockchains created by different developers to share information securely.

• Avalanche (AVAX): Avalanche was created in 2020, and is one of the highest yield-producing cryptos out there for staking.

It’s important to research your options to understand whether staking a certain cryptocurrency would be right for you. Also be aware, as mentioned earlier, that SoFi does not currently offer staking services. While members will soon be able to buy, sell, and hold certain cryptocurrencies, such as Ethereum, other cryptocurrencies listed above may not be offered.

Factors to Consider

As with any financial transaction, it’s always important to consider the potential risks of crypto staking. As outlined, there are multiple risks to weigh, and when it comes to staking specifically, you’ll want to think about the potential staking rewards you could earn versus how your holdings could otherwise be used to generate returns.

There can be numerous things to take into account, but when it comes to staking, consider the reliability of a given crypto network, volatility, security, and opportunity costs.

Is Crypto Staking Worth It?

Anyone can earn crypto by staking cryptocurrency. But unless someone is sitting on a huge stash of proof-of-stake coins, they’re not likely to get rich from staking.

Staking rewards, as mentioned above, are in some ways similar to earning interest on funds held in a savings account. Both are a form of passive income (with the possible exception of solo staking). They don’t require a user to do anything other than holding the right assets in the right place for a given length of time. The longer a user stakes their coins, the greater potential for generating bigger rewards.

But unlike savings accounts, there are a few variables particular to proof-of-stake coins that influence how much of a staking reward users are likely to receive. Users would do well to research these factors and more when searching for the most profitable staking coins:

• Potential reward size

• The size of the staking pool

• The size of holdings locked, or required to stake

Additionally, the fiat currency value of the coin being staked must also be taken into account. Assuming this value remains steady or rises, staking could potentially be profitable. But if the price of the coin falls, profits could diminish quickly.

The Takeaway

Staking is a way to use your crypto holdings or coins to earn additional rewards. It can be helpful to think of it as along the lines of funds generating interest in a savings account over time.

Essentially, coin holders allow their crypto to be used as a part of the blockchain validation process, and are rewarded by the network for the use of their assets. While there are risks to be aware of, such as the value of the cryptocurrency itself falling, staking may open up another potential avenue for generating returns.

SoFi Crypto is back. SoFi members can now buy, sell, and hold cryptocurrencies on a platform with the safeguards of a bank. Access 25+ cryptocurrencies, such as Bitcoin, Ethereum, and Solana, with the first national chartered bank to offer crypto trading. Now you can manage your banking, investing, borrowing, and crypto all in one place, giving you more control over your money.

Learn more about crypto trading with SoFi.

FAQ

How much can you earn from crypto staking?

How much you could potentially earn from crypto staking depends on the specific crypto and given return rates associated with it. Rewards can range wildly.

Is staking crypto safe?

Staking crypto comes with risk, including the risk that the cryptocurrency loses value while it’s locked, but some staking set ups may be riskier than others. As always, do some research to try and get a sense of how risky staking a specific crypto could be, as there can be some significant risks associated with certain assets.

Can you lose money by staking crypto?

It is possible to lose money by staking crypto since holdings are locked up and values can change, or there may be penalties and vulnerabilities on a given platform or within a specific blockchain network.

What is the difference between crypto staking and lending?

Staking involves earning rewards (typically in the form of cryptocurrency) by locking up your crypto holdings with a blockchain network to help it validate transactions. Lending involves lending cryptocurrency holdings to a borrower in order to earn interest. Note that crypto lending can come with the risk of the borrower not returning the borrowed holdings.

Do you have to pay taxes on staking rewards?

Yes, rewards earned from crypto staking (or crypto mining) are taxed as ordinary income. Taxpayers are required to report the fair market value of the cryptocurrency rewards in U.S. dollars at the date and time those rewards are made available to them.

The same cryptocurrency holdings may also be subject to capital gains taxes when they’re sold, exchanged for another cryptocurrency, or disposed of in another way. Capital gains and losses from those transactions must be reported to the IRS.

About the author

Samuel Becker

Sam Becker is a freelance writer and journalist based near New York City. He is a native of the Pacific Northwest, and a graduate of Washington State University, and his work has appeared in and on Fortune, CNBC, Time, and more. Read full bio.

Article Sources

Bitcompare. Crypto Staking Rewards Comparison.
Cornell Law School. consensus mechanism.
Ethereum.org. Earn rewards while securing Ethereum.

Photo credit: iStock/FreshSplash

CRYPTOCURRENCY AND OTHER DIGITAL ASSETS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Cryptocurrency and other digital assets are highly speculative, involve significant risk, and may result in the complete loss of value. Cryptocurrency and other digital assets are not deposits, are not insured by the FDIC or SIPC, are not bank guaranteed, and may lose value.

All cryptocurrency transactions, once submitted to the blockchain, are final and irreversible. SoFi is not responsible for any failure or delay in processing a transaction resulting from factors beyond its reasonable control, including blockchain network congestion, protocol or network operations, or incorrect address information. Availability of specific digital assets, features, and services is subject to change and may be limited by applicable law and regulation.

SoFi Crypto products and services are offered by SoFi Bank, N.A., a national bank regulated by the Office of the Comptroller of the Currency. SoFi Bank does not provide investment, tax, or legal advice. Please refer to the SoFi Crypto account agreement for additional terms and conditions.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOCRYP-Q325-046
SIPS_3335350_001

Dec

2025

Strike Price, Explained: Definition and Examples

Strike Price: What It Means for Options Trading

By Rebecca Lake | Growing Wealth, invest, Investing | Comments Off

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Table of Contents

What Is a Strike Price?
Examples of Strike Price in Options Trading
Moneyness
How Is Strike Price Determined?
How Do You Choose a Strike Price?
What Happens When an Option Hits the Strike Price?
FAQ

In options trading, a strike price represents the price at which an option purchaser can buy or sell an option’s underlying asset. An option strike price can also be referred to as an exercise price or a grant price, as it comes into play when a trader is exercising the option contract they’ve purchased.

A strike price can determine how much or how little an investor stands to gain by exercising an option contract, and can also inform the value of the option. Trading options can potentially generate higher rewards, though it can entail taking more risk than investing in individual stocks. Understanding strike prices is key to developing a successful options trading strategy.

Key Points

• Strike price is the price at which an option holder can buy or sell the underlying asset through the option.

• The strike price helps determine the value of an option and the potential gain for the trader.

• Strike prices are set when options contracts are written and can vary for different contracts.

• There are different types of options, including calls and puts, each of which will have a set strike price.

• Understanding strike price is crucial for developing a successful options trading strategy.

What Is a Strike Price?

An option is a contract that gives the owner or buyer of the option the right, though not the obligation, to buy or sell a particular security on or before a specific date, at a predetermined price. In options trading terminology, this price is called the strike price or the exercise price.

Strike prices are commonly used in derivatives trading. A derivative draws its value from an underlying investment. In the case of options contracts, this can be a stock, bond, commodity, or other type of security or index.

Further, options contracts can trade European-style or American-style. With European-style options, investors can only exercise them on their expiration date. American-style options can be exercised any time up to and upon the expiration date. This in itself doesn’t affect strike price for options contracts.

In options trading, there are two basic types of options: calls and puts. With either type of option, the strike price is set at the time the options contract is written. This strike price determines the price at which the underlying asset would be bought or sold if the option is exercised.

Calls

A call option conveys the right (though not the obligation) to a purchaser to buy shares of an underlying stock or other security at a set strike price. Call option writers are obligated to sell the shares if the option is exercised.

Puts

A put option conveys the right (though not the obligation) to a purchaser to sell shares of an underlying stock or other security at a set strike price. This is one way that investors can short a stock. Put option writers are obligated to buy the shares if the option is exercised.

Finally, user-friendly options trading is here.*

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OCC Options Disclosure Document.

Examples of Strike Price in Options Trading

Having an example to follow can make it easier to understand the concept of strike prices and how they may affect the value of an option contract. When trading options, traders must select the strike price and length of time they’ll have before exercising an option.

The following examples illustrate how strike price works when trading call or put options.

Buying a Call

Call options, again, give a purchaser the right, but not the obligation, to purchase a security at a specific price. At the same time, the seller of the call option must sell shares to the investor exercising the option at the strike price.

Let’s say you hold a call option to purchase 100 shares of XYZ stock at $50 per share (the strike price). You believe the stock’s price, currently trading at $45, will increase over time. This belief eventually pans out as the stock rises to $70 per share thanks to a promising quarterly earnings call. At this point, you could exercise your option to buy shares of the stock at the $50 strike price. The call option seller would have to sell those shares to you at that price.

The upside here is that you’re purchasing the stock at a discount, relative to its actual market price. You could then turn around and sell the shares you purchased for $50 each at the new higher price point of $70 each. This allows you to collect a $20 per share profit, less the premium you paid to purchase the call contract and any trading fees owed to your brokerage (or online brokerage).

Keep in mind, however, that if the price of the underlying stock remains below the strike price, the option will expire worthless, and you will lose the premium you paid for the option.

Buying a Put

Put options give purchasers the right, but not the obligation, to sell a security at a specific strike price. The seller of a put option has an obligation to buy shares from a trader who exercises the option.

So, assume that you hold a put option to sell 100 shares of XYZ stock at $50 per share (the strike price). You believe that the stock’s price, currently at $55, is going to decline in the next few months. The stock’s price drops to $40 per share so you decide to exercise the option. This allows you to make a profit of $10 per share (minus the premium paid per share and any fees), since you’re selling the shares at the $50 strike price, rather than their current lower market price.

But again, if the price of the stock remains above the strike price the option will expire with no value and you would lose the premium you paid upfront.

Writing a Covered Call

A covered call is an options trading strategy that can be useful when an investor believes the price of stock they own may remain neutral or rise slightly. This strategy involves doing two things:

• Writing a call option for a security

• Owning an equivalent number of shares of that same security

Writing (or selling) covered calls is a way to potentially generate income from the premiums traders pay to purchase the call option. Premiums paid by a call option buyer are nonrefundable, even if they choose not to exercise the option later.

The premium from a covered call may also offer a degree of downside protection if the stock price falls slightly (though losses would still be substantial if the price dropped significantly)..

So, say you own 100 shares of XYZ stock, currently trading at $25 per share. You write a call option for 100 shares of that same stock with a strike price of $30. You then collect the premium from the investor who buys the option.

One of two things can happen at this point: If the stock’s price rises slightly, but remains below the $30 stock price, then the option will expire worthless. You still keep the premium for writing it and you still own your shares of stock.

On the other hand, assume the stock’s price shoots up to $35. The purchaser exercises the option, meaning you must sell them those 100 shares. You still collect the premium, but your profit from selling those shares is capped at $5 per share, given the $30 strike price.

Investors should always consider the potential tradeoffs of writing covered calls, since they could cap upside potential. Covered calls are generally suitable for investors who would be comfortable selling their shares, if needed.

Moneyness

Moneyness describes an option’s strike price relative to its market price. There are three ways to measure the moneyness of an option:

In the Money

Options are in the money when they have intrinsic value. A call option is in the money when the market price of the underlying security is above the strike price. A put option is in the money when the market price of the underlying security is below the strike price.

At the Money

An option is at the money when its market price and strike price are the same (or nearly the same).

Out of the Money

An out-of-the-money option has no intrinsic value. A call option is out of the money if the market price of the underlying security is below the strike price. A put option is out of the money when the market price of the underlying security is above the strike price.

Understanding moneyness is important for deciding when to exercise options and when they may be at risk of expiring worthless.

How Is Strike Price Determined?

The strike price of an option contract is set when the contract is written. Strike prices may be determined by the exchange they’re traded on (like the Chicago Board Options Exchange, or CBOE). For listed options, strike prices are set by the exchange at standardized intervals based on the underlying asset’s market price.

A writer may issue multiple strike prices for the same underlying security so traders can choose the level they want. For example, you might see five option contracts for the same stock with strike prices of $90, $92.50, $95, $97.50 and $100. This allows investors an opportunity to select varying strike prices when purchasing calls or put options for the same stock.

Note, however, that writing calls that aren’t covered entails significant risk and can result in substantial losses. Both individual and institutional investors can write options, but there is significant risk involved — particularly when the calls they write aren’t covered.

How Do You Choose a Strike Price?

When deciding which options contracts to buy, strike price is an important consideration. Stock volatility and the passage of time can affect an option’s moneyness and your potential losses or profits should you exercise the option.

As you compare strike prices for call or put options, consider:

• Your personal risk tolerance

• Where the underlying asset is trading, relative to the option’s strike price

• How long you have to exercise the option

You may also consider using various options trading strategies to manage risk. That may include using covered calls as well as long calls, long puts, short puts, married puts, and others. Learning more about how to trade options can help you apply these strategies to pursue potential profits while potentially managing risk exposure, given the high risk of options trading.

What Happens When an Option Hits the Strike Price?

When the price of an option’s underlying asset is equal to or near the strike price it’s considered at the money. This means it has no intrinsic value as the strike price and market price are the same. There’s typically no incentive for an investor to exercise an option that’s at the money at expiration as there’s nothing to be gained from either a call or put option. In this scenario, the option may expire worthless.

If you’re the purchaser of an option that expires worthless, you would lose the money you paid for the premium to buy the contract. If you’re the writer of the option, you would profit from the premium charged to the contract buyer.

The Takeaway

Strike price is a critical concept for investors to know, especially if they’re trading or otherwise dealing with options as a part of their investing strategy. In an options contract, the strike price simply refers to the set price at which the purchaser can buy or sell the underlying security. Again, options can be high risk and fairly high-level, and may not be appropriate for all investors.

SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.

With SoFi Invest® online options trading, there are no contract fees and no commissions. Plus, SoFi offers educational support — including in-app coaching resources, real-time pricing, and other tools to help you make informed decisions, based on your tolerance for risk.

Explore SoFi’s user-friendly options trading platform.

FAQ

What is a strike price in options trading?

The strike price, also known as the exercise price or grant price, is the predetermined price at which an investor can buy or sell the underlying asset of an option contract. This price is set when the options contract is written. It’s a critical factor that helps determine the value of the option and an investor’s potential gain or loss upon exercising the contract.

How does the strike price work for call and put options?

For call options, the strike price is the price at which the purchaser has the right, but not the obligation, to buy the underlying security if the market price moves in their favor. For put options, the strike price is the price at which the purchaser has the right, but not the obligation, to sell the underlying security if the market price moves favorably.

Note that writers of options contracts are obligated to buy or sell the underlying security at the strike price if a purchaser chooses to buy or sell the underlying security.

What are the three measures of an option’s “moneyness”?

Moneyness describes an option’s strike price relative to its market price. An option that is in the money (ITM) has intrinsic value. A call is ITM if its market price is above the strike price; a put is ITM if its market price is below the strike price.

An option that is out of the money (OTM) has no intrinsic value. A call is OTM if the market price is below the strike price; a put is OTM if the market price is above the strike price.

An option is at the money (ATM) if the market price and strike price are the same.

Photo credit: iStock/Paul Bradbury

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-033

Dec

2025

A pink question mark is shown to illustrate questions people have about what 401(k) benchmarking is and how it works.

What Is 401(k) Plan Benchmarking?

By Mike Zaccardi, CMT, CFA | Growing Wealth, invest, Investing, Preparing for Retirement | Comments Off

Table of Contents

How 401(k) Benchmarking Works
The Importance of 401(k) Plan Benchmarking
How to Benchmark Your 401(k) Plan: 3 Steps
FAQ

Benchmarking a 401(k) retirement plan refers to how a company assesses their plan’s design, fees, and services to ensure they meet industry and ERISA (Employee Retirement Income Security Act) standards.

Benchmarking 401(k) plans is important for a few reasons. First, the company offering the plan needs to be confident that they are acting in the best interests of employees who participate in the 401(k) plan. And because acting in the best interests of plan participants is part of an employer’s fiduciary duty, benchmarking can help reduce an employer’s liability if fiduciary standards aren’t met.

If a company’s plan isn’t meeting industry benchmarks, it may be wise for an employer to change plan providers. Learn more about how benchmarking works and why it’s important.

Key Points

• Benchmarking evaluates 401(k) plan design, fees, and services to meet ERISA standards.

• Annual benchmarking can ensure compliance and help reduce employer liability.

• Administrative, investment, and transaction fees must be evaluated to make sure they are reasonable.

• Service quality of the plan, including customer support and investment guidance, is assessed.

• Optimizing 401(k) plan features may enhance employee retention and satisfaction.

How 401(k) Benchmarking Works

While a 401(k) plan is a convenient and popular way for participants to invest for retirement, the company offering the plan has many responsibilities to make sure that its plan is competitive. That is where 401(k) benchmarking comes into play.

An annual checkup is typically performed whereby a company assesses its plan’s design, evaluates fees, and reviews all the services offered by the plan provider. The 401(k) plan benchmarking process helps ensure that the retirement plan reduces the risk of violating ERISA rules. For the firm, a yearly review can help reduce an employer’s liability and it can save the firm money.

ERISA, the Employee Retirement Income Security Act, requires that the plan sponsor verifies that the 401(k) plan has reasonable fees. ERISA is a federal law that mandates minimum standards that retirement plans must meet. It helps protect plan participants and beneficiaries.

The Importance of 401(k) Plan Benchmarking

It is important that an employer keep its 401(k) plan up to today’s standards. Making sure the plan is optimal compared to industry averages is a key piece of retirement benchmarking. It’s also important that your employees have a quality plan to help them save and invest for retirement. Most retirement plan sponsors conduct some form of benchmarking planning, and making that a regular event — such as annually — is important so that the employer continuously complies with ERISA guidelines.

Employers have a fiduciary responsibility to ensure that fees are reasonable for services provided. ERISA also states that the primary responsibility of the plan fiduciaries is to act in the best interest of their plan participants. 401(k) benchmarking facilitates the due diligence process and reduces a firm’s liability.

How to Benchmark Your 401(k) Plan: 3 Steps

So, as an employer, how exactly do you go about benchmarking 401(k) plans? There are three key steps that plan sponsors should take so that their liability is reduced, and the employees get the best service for their money. Moreover, 401(k) benchmarking can help improve your service provider to make your plan better.

1. Assess Your 401(k) Plan Design

It’s hard to know if your retirement plan’s design is optimal. Two gauges used to figure its quality are plan asset growth and the average account balance. If workers are continuously contributing and investments are performing adequately compared to market indexes, then those are signs that the plan is well designed.

Benchmarking can also help assess if a Roth 401(k) feature should be added. Another plan feature might be to adjust the company matching contribution or vesting schedule. Optimizing these pieces of the plan can help retain workers while meeting ERISA requirements.

2. Evaluate Your 401(k) Plan Fees

A 401(k) plan has investment, administrative, and transaction fees. Benchmarking 401(k) plan fees helps ensure total costs are reasonable. It can be useful to take an “all-in” approach when assessing plan fees. That method can better compare service providers since different providers might have different terms for various fees.

But simply selecting the cheapest plan does not account for the quality and depth of services a plan renders. Additional benchmarking is needed to gauge a retirement plan’s quality. Here are the three primary types of 401(k) plan fees to assess:

• Administrative: Fees related to customer service, recordkeeping, and any legal services.

• Investment: Amounts charged to plan participants and expenses related to investment funds.

• Transaction: Fees involved with money movements such as loans, 401(k) withdrawals, and advisory costs.

3. Evaluate Your 401(k) Provider’s Services

There are many variables to analyze when it comes to 401(k) benchmarking of services. A lot can depend on what your employees prefer. Reviewing the sponsor’s service model, technology, and execution of duties is important.

Also, think about it from the point of view of the plan participants: Is there good customer service available? What about the quality of investment guidance? Evaluating services is a key piece of 401(k) plan benchmarking. A solid service offering helps employees make the most out of investing in a 401(k) account.

The Takeaway

Investing for retirement is more important than ever as individuals live longer and pension plans are becoming a relic of the past. With today’s technology, and clear rules outlined by ERISA, it may be easier for workers to take advantage of high-quality 401(k) plans to help them save and invest for the long term.

For the company offering the plan, establishing a retirement benchmarking process is crucial to keeping pace with the best 401(k) plans. Reviewing a plan’s design, costs, and services helps workers have confidence that their employer is working in their best interests. Benchmarking can also protect employers.

If your company already has a 401(k) plan that you contribute to as an employee, you might also consider other individual retirement accounts to open. You can learn more about various options available, such as IRAs. There are different types of IRAs, including traditional and Roth IRAs. You may want to explore them as an option to help reach your retirement savings goals.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

Help build your nest egg with a SoFi IRA.

🛈 While SoFi does not offer 401(k) plans at this time, we do offer individual retirement accounts (IRAs).

FAQ

How often should a 401(k) be benchmarked?

It’s considered a best practice to benchmark a 401(k) annually to make sure the plan complies with ERISA (Employee Retirement Income Security Act) guidelines. Making sure that the plan’s fees are reasonable and acting in the best interests of plan participants is part of an employer’s fiduciary duty. Benchmarking facilitates the due diligence process and reduces an employer’s liability if fiduciary standards aren’t met.

How do I benchmark my 401(k) fees?

To benchmark your 401(k) fees, take an “all-in” approach by calculating the service provider fees plus the investment expenses for the plan. This helps you compare your plan’s fees to fees charged by other service providers. In addition, assess the plan’s quality by looking at administrative fees (fees related to customer service and recordkeeping, for instance), investment fees (expenses related to investment funds and amounts charged to participants in the plan), and transaction fees (fees related to moving money, such as withdrawals or loans).

Why is 401(k) benchmarking important?

The process of 401(k) benchmarking is important for making sure a 401(k) plan is a quality plan and that it is in compliance with ERISA rules. An employer has a fiduciary duty to act in the best interest of their employees, and ensuring that a 401(k) plan has reasonable fees is part of that due diligence. Benchmarking can also help protect an employer and reduce their liability.

Photo credit: iStock/MicroStockHub

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q425-026

What Is Spoofing in Trading? How It Works and Its Consequences

What Is Spoofing?

What’s the Point of Spoofing?

Is Spoofing Illegal?

Example of Spoofing

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Consequences of Spoofing

How to Protect Against Spoofing

The Takeaway

FAQ

What does spoofing mean in the stock market?

Is spoofing legal?

How can you protect yourself from spoofing?

Black Swan Events and Investing, Explained

What Is a Black Swan Event?

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Examples of Black Swan Events

The Soviet Union’s Historic Collapse

The 9/11 Terrorist Attacks

The Dot-com Bubble

The 2008-2009 Financial Crisis

Why Do Black Swan Events Happen?

Can You Predict a Black Swan Event?

The Takeaway

FAQ

What is a black swan event in recent years?

What was the biggest black swan event?

What are the attributes that identify a black swan event?

Crypto Staking: A Beginner’s Guide to Earning Passive Income With Crypto

What Is Crypto Staking?

Crypto is back at SoFi.

SoFi Crypto is the first and only national chartered bank where retail customers can buy, sell, and hold 25+ cryptocurrencies.

Staking vs Mining: What’s the Difference?

The Role of Proof of Stake (PoS)

How Does Crypto Staking Work?

How to Start Crypto Staking

1. Choosing a Proof-of-Stake Cryptocurrency

2. Choosing a Staking Platform

3. Choosing Your Wallet and Hardware

4. Begin Staking

What Are the Different Ways to Stake Crypto?

Staking on an Exchange

Delegated Staking and Staking Pools

Running Your Own Validator Node

The Pros and Cons of Crypto Staking

The Benefits of Staking

The Risks of Staking

How to Choose the Best Coins for Staking in 2025

Factors to Consider

Is Crypto Staking Worth It?

The Takeaway

FAQ

How much can you earn from crypto staking?

Is staking crypto safe?

Can you lose money by staking crypto?

What is the difference between crypto staking and lending?

Do you have to pay taxes on staking rewards?

Strike Price: What It Means for Options Trading

What Is a Strike Price?

Calls

Puts

Finally, user-friendly options trading is here.*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

Examples of Strike Price in Options Trading

Buying a Call

Buying a Put

Writing a Covered Call

Moneyness

In the Money

At the Money

Out of the Money

How Is Strike Price Determined?

How Do You Choose a Strike Price?

What Happens When an Option Hits the Strike Price?

The Takeaway

FAQ

What is a strike price in options trading?

How does the strike price work for call and put options?

Crypto is
back at SoFi.

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