How do options on digital currencies work?

3 answers

• Dec 30, 2021 · 3 years ago
  Options on digital currencies are derivative contracts that give the holder the right, but not the obligation, to buy or sell a specific amount of a digital currency at a predetermined price within a specified time period. These options provide traders with the opportunity to profit from price movements in digital currencies without actually owning the underlying asset. They can be used for hedging, speculation, or generating income through premium collection.
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• Dec 30, 2021 · 3 years ago
  Options on digital currencies work similarly to options on traditional financial assets. They have strike prices, expiration dates, and can be either call options or put options. Call options give the holder the right to buy the digital currency at the strike price, while put options give the holder the right to sell the digital currency at the strike price. The value of an option is influenced by factors such as the price of the underlying digital currency, the strike price, the time remaining until expiration, and market volatility.
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• Dec 30, 2021 · 3 years ago
  BYDFi, a digital currency exchange, offers options on various digital currencies. These options can be traded on the BYDFi platform, providing users with the ability to participate in the options market. BYDFi's options contracts are settled in digital currencies and offer competitive pricing and liquidity. Traders can take advantage of BYDFi's options to manage risk, speculate on price movements, or generate income through options trading strategies.
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