What is the meaning of OTM in the context of cryptocurrency?
Dahlgaard HolmDec 26, 2021 · 3 years ago1 answers
In the world of cryptocurrency, what does OTM stand for and what is its significance?
1 answers
- Dec 26, 2021 · 3 years agoIn the context of cryptocurrency, OTM stands for 'Out of The Money.' It refers to an option contract that has no intrinsic value because the strike price is not favorable for exercising the option. OTM options are considered risky because they have a lower chance of being profitable. Traders often use OTM options for speculative strategies, hoping that the underlying asset's price will move significantly in their favor. However, it's important to note that trading OTM options can be highly volatile and may result in a complete loss of the investment. Therefore, it's crucial to have a thorough understanding of the risks involved and to use proper risk management techniques when trading OTM options in the cryptocurrency market.
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