What is the relationship between exercise price and strike price in the context of cryptocurrency options?

1 answers

• Dave JarvisDec 24, 2023 · a year ago
  In the context of cryptocurrency options, the exercise price and strike price are essentially interchangeable terms. They both refer to the predetermined price at which the option holder can buy or sell the underlying cryptocurrency. The exercise price is commonly used in American-style options, while the strike price is more commonly used in European-style options. However, regardless of the terminology, the relationship between exercise price and strike price remains the same. If the current market price of the cryptocurrency is higher than the exercise/strike price, the option is considered in-the-money and can be exercised for a profit. Conversely, if the market price is lower, the option is out-of-the-money and exercising it would result in a loss. Therefore, it's important for cryptocurrency option traders to carefully consider the exercise price/strike price relationship in order to make informed trading decisions.
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