What is the impact of intrinsic and extrinsic value on the pricing of cryptocurrency options?

1 answers

• Dec 26, 2021 · 3 years ago
  When it comes to the pricing of cryptocurrency options, intrinsic and extrinsic value are two important factors to consider. Intrinsic value is the actual value of the option, which is determined by the difference between the strike price and the current price of the underlying cryptocurrency. If the option has intrinsic value, it means that exercising the option would result in a profit. Extrinsic value, on the other hand, is the additional value of the option beyond its intrinsic value. It is influenced by factors such as time remaining until expiration, market volatility, and market demand for the option. The higher the extrinsic value, the more expensive the option will be. Therefore, both intrinsic and extrinsic value play a crucial role in determining the pricing of cryptocurrency options.
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