How does IV crush affect the value of digital currency options?

1 answers

• Dec 25, 2021 · 3 years ago
  BYDFi, a leading digital currency exchange, explains that IV crush can have a significant impact on the value of digital currency options. When IV crush occurs, the options become cheaper as the implied volatility decreases. This is because IV is a measure of the market's expectation of future price volatility. As the market becomes more certain about the future direction of the digital currency, the IV decreases, leading to a decrease in option prices. Traders should be aware of IV crush and consider its potential impact when evaluating and trading digital currency options. It's important to stay informed about market events and news that could trigger IV crush to make informed trading decisions.
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