What is the difference between being at the money and out of the money in the context of cryptocurrency trading?

1 answers

• Jan 14, 2022 · 3 years ago
  In the context of cryptocurrency trading, being at the money refers to a situation where the strike price of an option is equal to the current market price of the underlying cryptocurrency. This means that the option has no intrinsic value and its value is solely determined by its time value. On the other hand, being out of the money means that the strike price of the option is not favorable compared to the current market price of the underlying cryptocurrency. In this case, the option also has no intrinsic value and its value is determined by its time value. However, being out of the money implies that there is still a possibility for the option to become profitable if the price of the cryptocurrency moves in the desired direction. Traders need to carefully consider the strike price, current market price, and time remaining before the option expires to make informed trading decisions.
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