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What is the formula for determining the intrinsic value of options in the cryptocurrency industry?

avatarCharleen AnotidaDec 29, 2021 · 3 years ago1 answers

Can you explain the formula used to determine the intrinsic value of options in the cryptocurrency industry? I'm interested in understanding how the value of options is calculated and what factors are taken into consideration.

What is the formula for determining the intrinsic value of options in the cryptocurrency industry?

1 answers

  • avatarDec 29, 2021 · 3 years ago
    In the cryptocurrency industry, the formula for determining the intrinsic value of options is similar to that of traditional financial markets. For call options, the intrinsic value is calculated by subtracting the strike price from the current price of the underlying cryptocurrency. If the result is positive, the option has intrinsic value. For put options, the intrinsic value is calculated by subtracting the current price of the underlying cryptocurrency from the strike price. If the result is positive, the option has intrinsic value. It's important to note that the intrinsic value does not take into account any time value or other factors that may affect the option's price. It's always a good idea to consider other factors, such as volatility and market trends, when evaluating the value of options in the cryptocurrency industry.