What is the difference between the strike price and the spot price of a virtual currency?

1 answers

• Mar 23, 2022 · 3 years ago
  As an expert in cryptocurrency trading, I can tell you that the strike price and the spot price are essential concepts to understand. The spot price refers to the current market price of a virtual currency, which is the price at which it can be bought or sold immediately. On the other hand, the strike price is the predetermined price at which an options contract can be exercised. When trading options, the difference between the strike price and the spot price determines the profitability of the contract. If the spot price is higher than the strike price for a call option, the contract is considered in-the-money, and the trader can exercise the option for a profit. Conversely, if the spot price is lower than the strike price for a put option, the contract is also in-the-money. Understanding the relationship between these two prices is crucial for successful trading in the cryptocurrency market.
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