What are the differences between exercising and striking prices in the context of digital currencies?

1 answers

• Dec 30, 2021 · 3 years ago
  In the context of digital currencies, exercising and striking prices are important factors to consider when trading options. Exercising an option allows traders to convert their options into the underlying asset at the predetermined striking price. This can be beneficial if the market price of the digital currency is higher than the striking price, as it allows traders to buy the digital currency at a lower price. On the other hand, if the market price is lower than the striking price, it would not be profitable to exercise the option. Striking price, on the other hand, is the price at which the option can be exercised. It is determined when the option contract is created and provides traders with a reference point to evaluate the profitability of exercising the option. By understanding the differences between exercising and striking prices, traders can make informed decisions and optimize their trading strategies in the digital currency market.
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