What is the strike price of an option in the context of cryptocurrency trading? 💰

1 answers

• Dec 27, 2021 · 3 years ago
  The strike price of an option in cryptocurrency trading is the price at which the option holder can buy or sell the underlying asset when the option is exercised. It is determined at the time the option contract is created and remains fixed until expiration. The strike price is crucial because it determines the breakeven point and potential profit or loss for the option holder. If the market price of the cryptocurrency is above the strike price for a call option or below the strike price for a put option, the option is considered in-the-money and can be exercised for a profit. The strike price is influenced by factors such as the current market price, volatility, and time to expiration. Traders need to carefully consider the strike price when trading options to make informed decisions and manage their risk effectively.
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