How does the delta affect the value of put options in the world of digital currencies?
Buzlu MeybuzDec 26, 2021 · 3 years ago1 answers
In the world of digital currencies, how does the delta, a measure of the sensitivity of the option price to changes in the underlying asset price, impact the value of put options?
1 answers
- Dec 26, 2021 · 3 years agoIn the world of digital currencies, the delta of a put option plays a significant role in determining its value. The delta measures the rate of change in the option price relative to the change in the underlying asset price. When the delta is close to -1, it means that the put option is highly sensitive to price changes in the digital currency. This makes it an attractive option for investors who want to profit from a potential decline in the digital currency's value. However, when the delta is close to 0, the put option is less sensitive to price changes and may have a lower value. Therefore, understanding the delta is crucial for evaluating the value of put options in the world of digital currencies.
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